Visa and Dunamu, the parent company of South Korean cryptocurrency exchange Upbit, have formed a strategic partnership to explore stablecoin payments, cross-border remittances and artificial intelligence-powered commerce.

The companies will combine Dunamu’s digital asset technology with Visa’s global payments network to explore payment, remittance and settlement services in major markets, according to a Friday announcement from Dunamu.

“The spread of AI, stablecoins and tokenization is a key trend that will change how finance and commerce operate,” Dunamu CEO Oh Kyung-seok said, adding that the partnership aims to connect digital assets with traditional finance.

Dunamu and Visa are considering business models involving Open Standard’s proposed Open USD (OUSD), a dollar-backed stablecoin unveiled in June. Open Standard said more than 140 companies had signed up to use OUSD, including Visa, Mastercard, Stripe, Coinbase and BlackRock. Dunamu said OUSD is one of several stablecoin projects under review and that it has not prioritized a specific stablecoin for the partnership.

In July, Upbit said it was not participating in the issuance of OUSD after its operator, Dunamu, was named among the businesses involved in the initiative.

The companies will also explore agentic commerce, in which AI agents can search for products and services and make purchases and payments on a user’s behalf. They will examine ways to combine AI with stablecoin payment and settlement infrastructure.

Related: Mirae Asset lays out crypto, stablecoin, tokenization plans for Digital X

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

The Sandbox says it will directly reimburse eligible holders of bridged SAND after an Aug. 21 exploit that drained Ethereum-based tokens from a bridge vault. The incident, which targeted bridge infrastructure connected to Base and BNB Smart Chain, resulted in the loss of 14.744 SAND—valued at roughly $700,000 at the time—prompting the project to outline a structured repayment plan.

In a post-mortem shared Thursday, The Sandbox confirmed that compensation will be offered on a 1:1 basis for users who held bridged SAND on Base or BNB Smart Chain before the attack. The company says repayments will come from its treasury without minting new tokens, and that affected balances will be distributed through exchanges for a majority of eligible users.

Key takeaways

• The Sandbox will repay eligible holders of bridged SAND from Base and BNB Smart Chain at a 1:1 ratio using Ethereum-based SAND.
• The repayments are scheduled to begin within two weeks, with a claim window that extends for two additional weeks.
• More than 72% of eligible balances are held on centralized exchanges, which will reportedly distribute compensation directly to affected customers.
• According to The Sandbox, about 14.7 million SAND were drained—roughly 0.5% of the token’s 3 billion maximum supply—while the minted unbacked tokens were isolated.
• The compromised bridge contracts will be retired permanently, with future bridges expected to use newly deployed contracts.

Repayment plan for bridged SAND holders

The Sandbox’s reimbursement effort is aimed at users who held SAND that had been bridged onto Base or BNB Smart Chain prior to the Aug. 21 bridge exploit. The company states that claimants will receive an equal amount of Ethereum-based SAND (rather than a token of a different chain), using funds drawn from the project’s treasury. The project also emphasized that it will not mint new tokens to fund repayments.

Based on the company’s explanation, the claims process is expected to open within two weeks and then stay open for another two weeks. That gives eligible users a defined window to verify ownership and submit a claim where needed, while exchange customers may be handled automatically depending on the platform.

Where the losses came from, and what the attacker did

The Sandbox said the attacker exploited a configuration flaw in SAND’s bridge contracts on Base and BNB Chain. In the company’s account, the issue allowed the attacker to gain control over bridge message verification—ultimately enabling minting of unbacked tokens tied to the exploited bridge process.

The project confirmed that roughly 14.744 million SAND were drained from the Ethereum vault connected to the bridge. It also said that the compromised bridge activity led to the creation of more than 339 trillion unbacked SAND on the two targeted networks. However, The Sandbox added that those tokens have been isolated and cannot be bridged or redeemed.

Importantly for holders, The Sandbox stated that SAND on Ethereum and Polygon was not affected by the exploit. That means the core token supply on those networks did not face the same immediate impact as the bridged assets tied to Base and BNB Chain.

Isolation of unbacked tokens and retirement of compromised contracts

Beyond repayment, the company’s post-mortem focuses on containment and prevention. The Sandbox said that the bridge contracts used in the compromised configuration will be permanently retired. Any subsequent bridging between networks would be handled through newly deployed contracts intended to eliminate the exploited verification weakness.

The project’s description suggests that while the attacker succeeded in minting unbacked tokens during the bridge operation, The Sandbox designed—or was able to enforce—limits that prevented those tokens from moving into a redeemable or bridged state. For investors and traders, this distinction matters: it reduces the likelihood of a broader token supply shock across all supported networks, even if the event generated a large quantity of unbacked tokens during the attack.

Exchanges to distribute most compensation

The Sandbox also provided operational details about how compensation will reach users. According to the company, more than 72% of eligible balances are held on centralized exchanges. For those customers, the exchanges are expected to distribute compensation directly.

That approach may lower friction for most affected users by reducing the need for individual claims. Still, the project’s stated plan indicates that a claim process will exist—meaning users without exchange custody (or users not covered by exchange distributions) may need to apply during the opening window.

Token trading and market reaction

At the time of publication, SAND was trading around $0.04, according to CoinGecko, down about 10.4% over the previous seven days. The price drop reflects broader market conditions and how quickly bridge-security headlines can spill into sentiment, even when the project states that Ethereum and Polygon holdings were unaffected.

For market participants, The Sandbox’s commitment to 1:1 reimbursement and the claim timeline may help clarify risks for holders of bridged assets. However, the longer-term confidence impact will likely hinge on how smoothly the claims process runs, and whether monitoring of any remaining bridge-related surfaces finds no further issues.

Readers should watch the start of the claims window and follow how exchanges handle reimbursements for customers holding bridged SAND. Equally important will be The Sandbox’s progress deploying replacement bridge contracts and demonstrating that the retired configurations can’t be re-exploited through new bridge paths or integrations.

The Bank of Russia has added 2,600 crypto wallets linked to suspected illegal financial activity to a system used by banks and law enforcement after more than 1 billion rubles flowed into the addresses during the first half of 2026.

The Bank of Russia said the wallets belonged to companies, projects, individual entrepreneurs and other entities showing signs of illegal activity in the financial market. Banks and law enforcement agencies use the information system for digital compliance, client risk assessments and financial investigations.

During the same six-month period, the regulator identified 2,891 entities with signs of illegal financial activity, down nearly 31% from the first half of 2025. The figure remained close to the level recorded during the second half of last year.

Bank of Russia adds 2,600 crypto wallets to monitoring system

The 2,600 crypto wallets were added to a database that can help financial institutions assess transactions connected to entities flagged by the regulator. More than 1 billion rubles in crypto, based on its ruble equivalent, had been attracted through the identified addresses, according to the central bank.

The regulator sends information on suspected illegal financial activity to law enforcement agencies, Russia’s Federal Antimonopoly Service and other authorized bodies. Banks took restrictive measures against more than 500 payment details used for illegal financial activity during the first half of 2026.

Regulatory action during the period led to more than 330 administrative cases based on material supplied by the central bank, including information collected during previous reporting periods. Authorities took more than 450 other enforcement measures and restricted access to over 11,800 online resources belonging to suspected illegal financial market participants and pyramid schemes.

Crypto remained a common payment method among schemes tracked by the regulator. More than 74% of identified pyramid schemes used cryptocurrencies to attract funds, while the rest relied on foreign payment services or cash. Organizers used more than 940 websites, 120 Telegram channels and over 2,500 social media pages to bring users into their projects during the first six months of the year.

The figure was lower than in 2025, when the Bank of Russia identified more than 4,600 crypto wallets used by organizers of pyramid schemes to receive initial investment payments. Crypto was accepted by 84% of pyramid projects identified last year, up from 77% in 2024.

As crypto.news previously reported, the regulator has linked digital assets to fraudulent investment schemes for several years. In 2024, the central bank warned that scammers were using memecoins, tap-to-earn games and other popular crypto trends to attract victims. Its first-half 2024 data showed more than 3,490 entities with characteristics of pyramid schemes, 43% more than a year earlier.

Crypto remains a common tool in investment scams

Pseudo-investment projects identified this year frequently offered exposure to cryptocurrencies or promised income from crypto mining, according to the Bank of Russia. Some schemes promoted investments in data centers supposedly supplying computing capacity to miners, while others offered digital tokens said to track gold prices.

The regulator identified 929 entities with signs of financial pyramid activity and another 379 suspected of illegally attracting investments during the first half. Combined, the number of pyramid and other pseudo-investment projects fell 44% from the same period in 2025. Most operated online without physical offices and contacted potential clients through social networks, messaging services or phone calls.

Illegal lending moved in the opposite direction. The number of identified illegal lenders doubled from the first half of 2025, reaching 999, compared with 467 a year earlier. The Bank of Russia linked part of the increase to tighter requirements for legal lenders, which limited access to borrowing for customers with high debt burdens.

Among the products promoted outside the formal financial system were so-called crypto loans. Such services offered borrowers loans denominated in Tether’s USDT stablecoin or rubles converted at a specified exchange rate. The regulator said it continued to receive hundreds of complaints about the model while websites associated with such projects were blocked and replaced with duplicate resources.

Russia has been moving to bring more cryptocurrency activity under licensed financial institutions while keeping domestic crypto payments restricted. A law approved this summer created rules for exchanges, brokers, custodians and other intermediaries, with the Bank of Russia responsible for supervising the market. The framework permits regulated crypto activity and certain cross-border uses while maintaining the ban on using cryptocurrency as a domestic payment method.

Ahead of the new framework, the central bank published draft operating rules for cryptocurrency exchanges and digital asset depositories, including capital requirements and official registers for licensed market participants. The rules were prepared ahead of the country’s regulated crypto market rollout scheduled for September.

Russian authorities have been taking enforcement action against crypto businesses suspected of operating outside permitted channels. Back in August, more than 20 people were detained after authorities raided nine crypto exchanges in Moscow. Investigators alleged that the services converted proceeds from scams into cryptocurrency before transferring the assets to handlers in Ukraine.

Scammers turn to fake Kanye West ticket sales

Separate fraud campaigns detected this month have used crypto payments to target Russians seeking tickets for Kanye West concerts.

Cybersecurity company F6 said its Digital Risk Protection analysts found at least 10 websites registered since Aug. 17 across the .ru, .com, .site and .shop domains. The pages used names connected with West, including variations containing “ye,” “yerussia” and “ye-tickets,” while presenting themselves as official ticket or tour websites.

Some of the sites allowed visitors to select apparently available seats before requesting payment in cryptocurrency. Prices ranged from $60 for upper-level seating to $2,100 for a VIP box, according to F6. Other pages requested transfers to a phone number, with advertised ticket prices ranging from 28,000 rubles to 6.2 million rubles.

Several fake pages advertised tickets for concerts in Moscow even though the two announced performances were scheduled for St. Petersburg. Other sites redirected users who clicked the purchase button to illegal online casinos.

F6 found at least seven Telegram bots connected with the ticket campaign. Only one was active when researchers checked on Aug. 21, offering users a mini-app for selecting seats and entering contact details before requesting payment through a phone-number transfer. The company said requiring crypto or phone transfers when no other payment options are available is a sign of possible fraud because recovering money sent through such methods can be difficult.

The campaign follows other attempts to use interest in cryptocurrency to impersonate established Russian financial institutions. The anti-fraud project Moshelovka previously reported schemes that claimed to give Russians access to cryptocurrency trading through the Moscow Exchange.

The real exchange has been expanding its crypto-linked products within Russia’s regulated market. Moscow Exchange introduced indexes tracking Solana, XRP, Tron and BNB in May, adding them to its existing Bitcoin and Ethereum benchmarks. The products were designed for professional investors, while direct cryptocurrency trading remained outside the exchange’s existing offering. Moscow Exchange planned to expand the benchmark list to 10 crypto assets and had discussed futures linked to its crypto indexes.

World Liberty Financial’s proposed US trust bank has drawn a major Abu Dhabi backer, with Sheikh Tahnoon bin Zayed Al Nahyan and co-investors reportedly controlling 49% of the holding company behind the federally chartered venture.

The Wall Street Journal reported on Aug. 27, citing people familiar with the matter, that Tahnoon’s group is behind StringZ Holding RSC, which owns 49% of WLTC Holdings, the company formed around World Liberty Trust Company. An entity affiliated with US President Donald Trump’s family owns another 38%, one person familiar with the structure told the newspaper.

The reported ownership comes two weeks after the Office of the Comptroller of the Currency granted World Liberty Trust Company preliminary conditional approval to operate as a national trust bank. The OCC’s Aug. 14 decision lists StringZ among the investors in WLTC Holdings, although the published document does not identify Tahnoon as its backer or disclose the size of its holding.

Under the proposed structure, World Liberty Trust Company would take over issuance and redemption of World Liberty Financial’s USD1 stablecoin, manage the reserves supporting the token and provide digital asset custody services. The company’s January application also proposed institutional custody and conversion services once the bank becomes operational.

World Liberty Financial bank remains subject to final OCC approval

World Liberty Trust Company cannot begin operating under the charter yet.

The OCC’s preliminary approval requires the company to satisfy its pre-opening conditions before the regulator grants final authorization. World Liberty had moved closer to approval by June, when former OCC officials told NOTUS that the Trump-linked company was widely expected to secure the national trust bank charter.

Its application describes WLTC Holdings as the sponsor of a de novo national trust company based in Florida. World Liberty Trust Company would not carry Federal Deposit Insurance Corp. insurance, and its proposed business would focus on trust activities, stablecoin operations and digital asset custody.

The bank would also manage the reserves backing USD1. World Liberty’s application said those reserves would include US dollars held at financial institutions, US government money market funds and cash equivalents, with USD1 designed to maintain a one-to-one value against the dollar.

As part of its approval process, the OCC required three shareholders to sign commitments limiting their ability to influence management or control the bank, according to the Journal. StringZ was among the shareholders subject to those commitments, alongside a Trump family-affiliated entity and another shareholder associated with World Liberty co-founders Zak Folkman and Chase Herro.

StringZ’s commitment was signed by Hamad Khlfan Ali Matar Alshamsi, according to the report. Alshamsi previously served as a director at G42, the Abu Dhabi artificial intelligence company chaired by Tahnoon.

Tahnoon previously backed a 49% World Liberty stake

The reported bank investment follows Tahnoon’s earlier financial ties to World Liberty Financial itself.

A Tahnoon-backed investment vehicle acquired a 49% stake in World Liberty Financial for about $500 million shortly before Trump returned to the White House in January 2025, according to earlier reporting. Crypto.news previously reported that the $500 million investment was made through Aryam Investment 1 and was signed by Eric Trump.

The investment placed Tahnoon-linked capital among World Liberty’s largest shareholders. Another crypto.news report said the transaction was completed four days before Trump’s inauguration and that Trump later said he had no knowledge of the deal, saying his sons and family handled the business.

Tahnoon serves as the UAE’s national security adviser and is the brother of UAE President Sheikh Mohamed bin Zayed Al Nahyan. He also chairs G42, which has become one of Abu Dhabi’s main artificial intelligence companies.

The US government authorized exports of advanced artificial intelligence chips to G42 in November 2025 after Washington and Abu Dhabi had reached an AI cooperation framework earlier that year. The timing of US technology policy toward the UAE and Tahnoon’s investment in World Liberty later became part of questions raised by Democratic lawmakers.

In February, Sens. Elizabeth Warren and Andy Kim sought a national security review of the investment and asked whether the Committee on Foreign Investment in the United States had examined the transaction. Their request also questioned whether foreign investors could obtain influence over World Liberty or access information connected to the company’s financial operations.

The lawmakers’ request followed calls for a CFIUS probe into the reported UAE investment and its ownership terms.

USD1 would move under the proposed trust bank

World Liberty’s banking application places USD1 at the core of the proposed institution.

Launched in 2025, the dollar-pegged token was initially issued with reserves consisting of short-term US Treasuries, cash deposits and other cash equivalents. Its circulation later rose into the billions of dollars as World Liberty expanded distribution and institutional use.

By June 2026, USD1’s circulating supply had reached about $4.4 billion while World Liberty continued pursuing its trust bank charter, according to earlier USD1 coverage.

One of the token’s largest early transactions was tied to Abu Dhabi. MGX, an investment company chaired by Tahnoon, used USD1 for a $2 billion investment into Binance in 2025, bringing the stablecoin into a large institutional transaction shortly after its launch. The deal also drew political attention in Washington because of World Liberty’s links to the Trump family and Tahnoon’s role in the UAE government.

World Liberty’s proposed bank would bring issuance, redemption and reserve management for USD1 inside a federally supervised national trust company if the OCC grants final approval. Its filing also allows the trust company to provide digital asset custody to institutional clients.

Lawmakers have continued examining World Liberty’s foreign ties

World Liberty’s ownership and bank application have remained under congressional scrutiny as regulators consider the trust company’s final authorization.

During the OCC review, Democratic lawmakers questioned Comptroller Jonathan Gould over how the agency would handle a bank application connected to the president’s family. Gould said during a June House Financial Services Committee hearing that the application would be assessed under existing banking law and government ethics requirements, as reported during the charter review.

The Journal reported that OCC officials said career staff handled World Liberty’s application and consulted experienced government ethics officials during the review. A World Liberty spokesperson separately said career OCC staff evaluated the filing against the statutory, regulatory and policy requirements governing bank charter applications.

The OCC’s published Aug. 14 decision confirms that World Liberty Trust Company received preliminary conditional approval and that StringZ is among its investors. Final authorization remains dependent on World Liberty satisfying the regulator’s conditions before opening the trust bank.

Virtu Financial, M1X Global and Tradeweb completed an institutional repurchase transaction using a sovereign digital bond on Aug. 27, with the full repo and repurchase cycle settling on the Canton Network in under 10 minutes.

The transaction used USDM1, a dollar-denominated bond issued onchain by the Republic of the Marshall Islands, as collateral. Securities delivery, the cash payment and the return transaction settled atomically on the same network, according to a joint company release.

The companies called it the “first known” repo executed through a major institutional trading venue to combine natively issued sovereign collateral with fully onchain settlement and no prime broker. That designation remains a company claim because no independent industry registry tracks every private blockchain repo.

Virtu and Tradeweb complete the repo without T+1 delays

A repo is a short-term financing transaction in which one party sells securities for cash and agrees to repurchase them later. The securities serve as collateral for the financing.

Virtu’s transaction followed the structure of a conventional sovereign-collateralized repo. However, the participants moved the bond and cash directly through Canton instead of relying on separate custodial ledgers and traditional T+1 settlement systems.

A full repo cycle in under 10 minutes. A significant milestone for on-chain financial markets.

Congratulations to our partner @m1xglobal, alongside Virtu Financial and @Tradeweb, on completing the first fully on-chain repo transaction using a sovereign digital bond as…

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— tZERO (@tZERO) August 27, 2026

Tradeweb said the bilateral transaction involved regulated institutional counterparties. The companies did not disclose the transaction’s value, cash instrument, interest rate, maturity or the identities of the counterparties beyond Virtu’s involvement.

Completing both the initial transfer and repurchase within 10 minutes demonstrated the network’s technical settlement capability. It does not establish how the system would perform under heavy transaction volumes, stressed markets or broader institutional adoption.

USDM1 turns a digital bond into active collateral

USDM1 is a sovereign obligation issued natively onchain by the Marshall Islands. It is structured under New York law in the style of a fully collateralized Brady bond and backed 1:1 by short-dated U.S. Treasurys held in bankruptcy-remote custody.

According to M1X, investors receive a first-priority security interest in that collateral under Articles 8 and 9 of the Uniform Commercial Code. The instrument continues paying a sovereign coupon when pledged as repo collateral or margin.

The companies said USDM1 can enter standard close-out netting arrangements used for derivatives and repos. They also said its Treasury backing could provide more favorable balance-sheet treatment than unsecured digital assets or corporate stablecoins. Actual treatment depends on each institution’s regulator, jurisdiction and risk framework.

USDM1 is available through Tradeweb. Anchorage Digital, BitGo and tZERO provide custody services, while Bank of Guam has announced institutional support for the instrument.

U.S. securities restrictions still apply to USDM1

Although USDM1 uses U.S. Treasurys as backing and follows New York law, it has not been registered under the U.S. Securities Act or state securities laws.

M1X’s legal disclosures state that USDM1 is offered and sold outside the United States under Regulation S. It generally cannot be offered, sold or pledged to U.S. persons unless an exemption applies.

That limitation is relevant because Virtu and Tradeweb are U.S.-headquartered companies. The announcement said the transaction occurred between regulated counterparties but did not explain their jurisdictions or the exemption supporting their participation.

The legal structure therefore combines a Marshall Islands sovereign issuer, New York-law documentation, Treasury collateral and blockchain settlement. Broader adoption will depend partly on whether institutions can integrate those components with their existing compliance and capital requirements.

Canton expands its institutional settlement tests

Canton is designed for regulated financial transactions that require privacy and permission controls. Its synchronized settlement system allows linked transfers to complete together, reducing the risk that one side settles while the other fails.

The repo follows a July transaction in which Tradeweb transferred a tokenized U.S. Treasury from Franklin Templeton to Virtu against USDCx. In related coverage, a cross-chain swap engine connected Canton with Ethereum, Solana and Robinhood Chain using liquidity from FalconX.

Canton’s settlement options have also expanded beyond USDCx. World Liberty Financial recently issued its USD1 stablecoin natively on Canton for transactions involving tokenized assets, collateral and lending.

The next test is repeatability. Virtu, M1X and Tradeweb did not announce another repo, a commercial launch schedule or transaction-volume targets. Further trades would need to show whether the 10-minute cycle can operate across additional counterparties, settlement assets and market conditions.

The US Securities and Exchange Commission has proposed allowing crypto projects to raise up to $75 million annually without full registration, reopening public token fundraising at a time when investor demand for new tokens has fallen sharply from the ICO boom.

According to Bloomberg, the proposal could restore a legal route for US investors to participate in public token sales after years of enforcement actions effectively pushed much of the business offshore, but venture investors question whether the market that fueled the 2017 and 2018 ICO frenzy still exists.

The SEC unveiled Regulation Crypto Assets on Aug. 18 with two exemptions covering investment contracts involving crypto assets. An early stage startup exemption would permit projects to raise up to $5 million over four years, while a separate fundraising exemption would allow issuers to collect as much as $75 million during any 12 month period.

Both routes would require issuers to provide disclosures to investors, while projects using the larger exemption would need to provide financial statements and meet ongoing reporting requirements.

The proposal is now open for public comments for 60 days following publication in the Federal Register.

SEC token rules could reopen public crypto fundraising

Public token sales were one of crypto’s main fundraising methods during the last market cycle before regulators began pursuing issuers over unregistered securities offerings.

ICOs raised about $3 billion in January 2018 alone at their peak, Bloomberg reported. Projects could attract capital with little more than a white paper and a newly issued token, with buyers frequently betting on the token rising once it reached secondary markets.

Token deals by venture funds. Source: Bloomberg.

Failed projects, falling crypto prices, pump and dump schemes and regulatory lawsuits eventually brought much of that activity to an end.

Under the SEC’s new proposal, projects would face a more structured process. Principles based disclosures would apply to both exemptions, while federal antifraud and antimanipulation provisions would continue to cover participating issuers.

The rules follow months of work by the SEC to build a dedicated framework for crypto fundraising. Crypto.news previously reported in July that the agency had placed Regulation Crypto Assets on its 2026 rulemaking schedule after the framework advanced through White House review.

The proposal contains another provision addressing what happens after tokens are initially sold.

A conditional safe harbor would allow a crypto asset to stop being subject to an investment contract once an issuer has completed or permanently ended the essential managerial work it promised investors. The mechanism would separate the original fundraising contract from the crypto asset after the conditions of the safe harbor have been met.

An earlier SEC safe harbor framework submitted for White House review in April laid out the startup exemption, fundraising exemption and a route for assets to leave investment contract treatment.

New token sales would enter a different crypto market

Making public token fundraising available again does not guarantee projects will find the same pool of buyers that powered the previous ICO cycle.

Investor activity has become concentrated around Bitcoin and a smaller group of established crypto assets, while speculative traders have gained access to products including perpetual futures and prediction markets. Artificial intelligence linked stocks have become another destination for risk capital, according to Bloomberg.

Crypto venture firms have changed their investment strategies as well. Token deals have fallen from earlier levels, while some large crypto investors have expanded into artificial intelligence, robotics and other technology sectors.

April fundraising data offered another view of where capital has been going. Crypto companies raised about $860 million across 55 disclosed deals that month, with centralized finance accounting for roughly $606 million, according to crypto fundraising data previously reported by crypto.news.

Infrastructure projects raised about $105 million and decentralized finance companies attracted roughly $90 million. Two centralized exchanges accounted for around $580 million, or about 67% of the month’s disclosed total, while prediction market and AI projects attracted early stage investment.

For newly issued tokens, the competition for speculative capital therefore extends across several markets that either did not exist or were far smaller during the ICO boom.

“ICOs of 2026 are not the ICOs of 2018,” GSR research analyst Carlos Guzman told Bloomberg. “The days when a white paper and a dream were enough to attract capital are over.”

Dragonfly general partner Tom Schmidt raised a similar concern over the timing of the SEC proposal, arguing that market structure questions have become more pressing for the industry.

“It’s obviously better than nothing, but would have been helpful to have this a few years ago versus now, where the most pressing items are things that CLARITY was supposed to answer, and less on fundraising,” Schmidt said.

CLARITY Act remains part of the regulatory question

The SEC proposal is moving separately from the Digital Asset Market CLARITY Act, leaving Congress to determine the longer term division of regulatory authority over crypto markets.

The CLARITY Act would divide digital assets into statutory categories and assign regulatory responsibilities between the SEC and Commodity Futures Trading Commission. The legislation has faced delays in the Senate despite advancing through earlier stages of the legislative process.

Senate Republicans released a 616 page merged draft in July that combined Banking and Agriculture committee provisions. The text divided digital assets into digital commodities, investment contract assets and permitted payment stablecoins, with a maturity certification process allowing qualifying tokens to move from securities treatment as their networks decentralize.

Regulation Crypto Assets addresses part of the same problem through the SEC’s existing authority.

Under the agency’s proposal, the $5 million startup exemption would apply over a four year period, while the $75 million fundraising route could be used during each 12 month period. The latter would impose financial statement and ongoing reporting requirements that were largely absent from the ICO market of 2017 and 2018.

For some venture investors, having a defined route for legitimate token launches could still change how early stage crypto networks raise money in the US.

“In the midst of this sideways market, this proposal makes me cautiously optimistic around what to expect ahead for digital assets in the US,” Strobe Ventures partner Winnie Lau told Bloomberg. “It’s a step in the right direction with a pathway for early-stage teams to build token networks, raise capital, and innovate in the US.”

Pantera Capital general partner and portfolio manager Cosmo Jiang pointed to the difference between speculative memecoin launches and projects attempting to build networks with functional tokens.

“We lived in a strange world where if one launched a memecoin it was legal, but if one launched a token that actually tried to produce any value it was illegal — that’s the exact opposite of functional capitalist society,” Jiang said.

Crypto investors have become more selective

Market conditions provide another hurdle for projects considering new token sales.

Bitcoin remained down nearly 10% for 2026 despite its latest recovery, while gold had gained more than 7% for the year, according to Bloomberg data. Crypto prices were still recovering from the sharp market selloff in October, leaving investors less willing to finance projects solely because they issued a token.

The concentration of investment in established assets has not eliminated demand for crypto exposure. Exchange traded funds tracking gold and Bitcoin attracted a combined record $7 billion over the five trading days through Tuesday, Bloomberg reported.

Regulators, meanwhile, are continuing to work on rules governing how crypto assets are classified and traded after issuance. The SEC and CFTC issued a joint interpretation in March setting out categories for digital assets, while the CLARITY Act would put classifications and regulator responsibilities into federal law if Congress passes the legislation.

The Senate debate has continued into August. Senators Elizabeth Warren and Richard Blumenthal asked the SEC this month to investigate President Donald Trump’s memecoin as lawmakers remained divided over ethics provisions in the legislation, with the dispute becoming one of the issues holding up the CLARITY Act.

For projects that choose the SEC’s proposed fundraising route, compliance would begin well before secondary trading. Issuers using the exemptions would remain subject to federal antifraud and antimanipulation rules, and the larger fundraising exemption would require financial statements and continuing reports after capital has been raised.

Bitcoin has begun moving more closely with gold and less like a technology stock, according to Grayscale research published on Aug. 27, as renewed concerns about U.S. debt and fiscal deficits revive the “debasement trade.”

Grayscale Head of Research Zach Pandl said Bitcoin’s 90-day correlation with gold has climbed above 50%. The measure stood barely above zero at the beginning of 2026.

Over the same period, Bitcoin’s correlation with the Nasdaq 100 fell from more than 60% to approximately 33%. Pandl argued that the change may show investors reconsidering Bitcoin as a scarce monetary asset rather than treating it primarily as a high-risk technology investment.

The figures describe recent price relationships, not permanent characteristics. Grayscale did not claim that rising federal debt directly caused the correlation change or guarantee that Bitcoin will continue following gold.

Bitcoin-gold correlation points to changing market behavior

A correlation of 100% would mean two assets moved perfectly together, while zero would indicate no consistent relationship. A reading above 50% suggests a moderate positive relationship during the measured period.

Bitcoin’s rising gold correlation therefore means the two assets have moved in the same direction more frequently during recent sessions. It does not mean their returns, volatility or drawdowns were equal.

Grayscale: Bitcoin’s correlation with gold rises above 50% as “debasement trade” returns

Grayscale Head of Research Zach Pandl said Bitcoin’s 90-day correlation with the Nasdaq 100 has fallen from over 60% to roughly 33%, while its correlation with gold has risen from near… pic.twitter.com/gJjTcAYaFH

— Wu Blockchain (@WuBlockchain) August 28, 2026

Gold has a longer history as a reserve asset and monetary hedge. Central banks hold it directly, and its price generally moves less sharply than Bitcoin. Bitcoin remains exposed to cryptocurrency leverage, exchange flows, regulation and changes in investor risk appetite.

The 90-day window also matters. Correlations can produce different readings when calculated across 30 days, one year or an entire market cycle. A sharp market event can materially change a short rolling measurement.

Pandl framed the current shift as a possible “regime change,” rather than a confirmed structural break. Sustained evidence would require Bitcoin’s relationship with gold to remain elevated across longer periods and varied market conditions.

Nasdaq correlation falls as the AI trade weakens

For much of the previous year, Bitcoin moved alongside high-growth technology companies during an artificial intelligence-driven rally. Lower interest-rate expectations and abundant liquidity supported both crypto assets and the Nasdaq 100.

That relationship has recently weakened. A fall in the 90-day correlation from above 60% to about 33% indicates Bitcoin has become less tightly linked to large technology stocks, according to Grayscale’s research.

The shift coincided with a period in which bond markets became volatile and investors reassessed long-term U.S. borrowing costs. Bitcoin recovered from $62,679 on Aug. 17 to approximately $79,500 on Aug. 21, producing a 27% five-day advance.

As crypto.news previously reported, the rally coincided with Treasury buyback changes and heavy spot ETF demand. Short liquidations and a weaker dollar also contributed, making it difficult to assign the move to one macroeconomic factor.

Bitcoin subsequently surrendered part of that gain. The pullback showed that stronger gold correlation does not remove the asset’s short-term volatility.

U.S. debt revives the Bitcoin debasement trade

The debasement trade describes demand for assets perceived as resistant to declining fiat-currency purchasing power. Gold has traditionally filled that role, while Bitcoin’s fixed issuance limit has created a digital alternative.

Bitcoin has no central issuer and carries a maximum supply of 21 million coins. Its issuance schedule is transparent, although its market price remains highly variable.

U.S. gross federal debt crossed $40 trillion on Aug. 18, reaching approximately $40.05 trillion, according to Treasury data. The total reached about $40.10 trillion by Aug. 25.

The Congressional Budget Office projects a $1.9 trillion federal deficit for fiscal 2026. It expects annual deficits to expand under current law as interest costs, mandatory spending and borrowing requirements increase.

Grayscale argued that persistent deficits and higher long-term yields could encourage investors to seek scarce assets outside the government monetary system. That is an investment thesis, however, and does not prove that debt growth will automatically lift Bitcoin.

BlackRock has made a similar case. In related coverage, its digital-assets head said rising U.S. debt strengthens Bitcoin’s long-term investment case, while cautioning that the asset’s performance depends on several market drivers.

What could confirm or reverse the correlation shift

The next evidence will come from Bitcoin’s behavior during renewed stress in stocks and bonds. Continued gains alongside gold while technology shares weaken would support Grayscale’s interpretation.

A simultaneous decline with the Nasdaq during a broad risk-off event would instead suggest that Bitcoin still behaves primarily as a volatile risk asset. ETF flows, dollar strength, real yields and derivatives positioning may also affect that relationship.

Investors must also watch whether the Bitcoin-gold correlation remains above 50% as the 90-day calculation adds new observations. Rolling correlations can reverse even when the broader fiscal backdrop remains unchanged.

Pandl said Bitcoin and other scarce digital assets “may be entering a more favorable regime.” The wording makes the outlook conditional. It describes a possible allocation shift, not a confirmed price trajectory.

For now, the data show that Bitcoin has recently behaved less like the Nasdaq 100 and more like gold. Whether that marks a durable monetary role will depend on performance across a longer period than one 90-day window.

Tokenized deposits have raised concerns that faster movement of bank money could reduce U.S. banks’ capacity to fund long term loans by hundreds of billions of dollars if the technology reaches widespread adoption.

According to an Aug. 25 research paper by Federal Reserve Bank of Dallas economists Rosie Levy and Srini Ramaswamy, large scale adoption of tokenized deposits could shorten the period that customer funds remain at banks and make those deposits more sensitive to interest rates. The authors said both effects could weaken banks’ ability to use deposits to fund assets with longer maturities.

The paper examines the potential effects of large scale adoption without making a judgment on whether such adoption will occur. The views expressed belong to Levy and Ramaswamy and should not be attributed to the Dallas Fed or the Federal Reserve System.

Tokenized deposits represent commercial bank deposits on blockchain infrastructure while keeping the underlying funds within the regulated banking system. Unlike stablecoins, they remain claims against the issuing bank and can pay interest, although moving them between different issuers remains more difficult.

Crypto.news has previously explained how a tokenized bank deposit maintains a one to one relationship with money held on the issuing bank’s balance sheet. For adoption to expand substantially, Levy and Ramaswamy said deposit tokens would need to circulate outside the bank that issued them, with financial institutions already exploring consortium and association models that could allow such transfers.

Tokenized deposits could reduce bank lending capacity

The researchers focused on the characteristics of conventional deposits that allow banks to use customer funds to finance assets with longer maturities.

Demand deposits can legally be withdrawn at any time, but balances tend to remain at banks for considerably longer than overnight. Banks account for that behavior through a weighted average life, or WAL, which measures how long deposits are expected to remain on their balance sheets.

Deposits tend to have relatively low sensitivity to changes in market interest rates as well. Levy and Ramaswamy said the combination of longer weighted average lives and low deposit betas makes those balances behave like longer duration liabilities, allowing banks to hold longer maturity fixed rate loans.

Tokenization could affect both characteristics. Instant settlement would let customers seeking higher yields move funds between institutions almost immediately, potentially shortening the average life of deposits while increasing competition between banks for those balances.

Programmable deposit tokens could accelerate the process. The researchers said agentic artificial intelligence combined with smart contracts could theoretically allow funds to move toward higher yielding accounts without requiring customers to initiate every transfer themselves.

Tokenized money market funds could compete directly with deposits as friction around moving funds declines. Corporate deposits may remain harder to move because businesses often maintain banking relationships for clearing, custody and cash management, though real time payments could let companies manage intraday liquidity more precisely.

Using Federal Reserve H.8 data, Levy and Ramaswamy calculated that U.S. commercial banks held about $25.7 trillion in assets as of July 15. Applying assumed durations to different asset classes produced roughly $7.03 trillion in 10 year equivalent duration exposure.

Deposits support most of that exposure. The researchers estimated that approximately $5.8 trillion, or about 80% of the $7 trillion in duration risk carried by banks, is supported by the duration characteristics of deposits.

Under their calculations, a 10% reduction in the weighted average life of deposits would cut the banking system’s aggregate maturity transformation capacity by about $580 billion in 10 year equivalents. A 10% increase in deposit rate sensitivity could reduce banks’ duration risk appetite by around $700 billion, assuming a four year weighted average deposit life.

Banks could preserve a similar lending portfolio by relying more heavily on term debt. Levy and Ramaswamy said funding more lending through wholesale debt would make the economics resemble those of nonbank financial firms and could increase credit costs for consumers and businesses.

Faster transfers could increase bank liquidity needs

Liquidity presents a separate concern because banks maintain high quality liquid assets to manage withdrawals and meet regulatory requirements such as the liquidity coverage ratio.

Different deposit categories receive different assumed outflow rates in bank stress tests. Operational deposits tend to receive lower assumptions because companies maintaining clearing, custody or cash management relationships are considered less likely to move those funds quickly.

Real time tokenized transfers could increase volatility in deposit balances and uncertainty over potential withdrawals. If tokenization changes the composition of a bank’s deposit base, expected outflows during periods of stress could rise even when the overall amount of deposits remains unchanged.

Without changes in the use of intraday credit or the Federal Reserve’s discount window, Levy and Ramaswamy said banks could respond by holding larger portfolios of high quality liquid assets. Reserves and U.S. Treasuries could receive priority because they provide immediate or almost immediate liquidity.

The researchers pointed to Brazil’s Pix instant payment network as one comparison for how faster movement of money can affect bank balance sheets.

Launched in 2020, Pix allows individuals to make free interbank transfers around the clock. The system had around 200 million active users by the first quarter of 2026, while monthly transactions totaled roughly $650 billion.

A 2025 study using Brazilian regulatory data found that heavier Pix usage increased banks’ demand for liquid assets, particularly government bonds, while reducing credit intermediation. Within their remaining loan books, banks increased the share of subprime loans as they sought higher returns and capital efficiency.

U.S. banks are building shared tokenized deposit networks

The research comes as major U.S. banks work on infrastructure that would allow tokenized deposits to move between financial institutions instead of remaining inside individual bank networks.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are developing a shared tokenized deposit network through The Clearing House, with a launch targeted for the first half of 2027.

The network is expected to initially serve multinational companies, with potential uses including programmable treasury operations, real time liquidity management and cross border payments. More than a dozen other institutions, including BNY, HSBC, PNC, Santander, TD Bank, Truist and U.S. Bank, have backed the project.

JPMorgan and Citigroup already operate their own blockchain based payment infrastructure, but the planned network would allow tokenized bank money to move between participating institutions.

Wells Fargo is moving ahead with a separate rollout and plans to launch tokenized deposits for corporate and commercial clients this fall. The initial pilot will support U.S. dollar to British pound transactions for selected customers before the bank expands to more clients, countries and currencies during 2027.

The bank said the service will allow customers to move, program and settle funds around the clock without leaving the regulated banking system.

SWIFT has taken another route toward continuous blockchain based payments. The financial messaging network moved its blockchain ledger into deployment in July, with 17 banks preparing to test tokenized deposit payments for round the clock cross border settlements.

HSBC, Citi, BNP Paribas, UBS, ANZ, DBS and Standard Chartered were among the institutions participating in the initial rollout after nine months of development. The system is designed to support weekend and overnight payments while retaining existing compliance, credit, risk and control standards.

Project Agorá tests tokenized bank money across borders

Central banks and commercial lenders have been testing another model through Project Agorá, a joint initiative involving the Bank for International Settlements and the Institute of International Finance.

Levy and Ramaswamy cited the project as an example of work exploring a unified ledger that combines tokenized central bank money and commercial bank deposits for cross currency transactions.

The Bank of Korea completed tokenized reserve transfer tests under Project Agorá in July, processing transactions across six currencies and several cross border payment scenarios.

The exercise involved the Korean won, U.S. dollar, euro, British pound, Swiss franc and Japanese yen. South Korean commercial banks participating in the tests included KB Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank and Hana Bank.

Participating institutions processed transactions worth about 800,000 Swiss francs across 17 payment scenarios. The tests covered single and dual currency settlements between companies and banks, payment versus payment foreign exchange settlements and transfers within the same financial group.

For one domestic test, the Bank of Korea worked with NongHyup Bank and Shinhan Bank to transfer 20 million won between the lenders using tokenized reserve funds. The central bank received payment instructions from both institutions before issuing, transferring and redeeming the tokenized reserves on the Project Agorá platform.

Kula co founder Chris Turner separately cautioned that the speed of a blockchain transfer does not necessarily mean the underlying financial claim settles at the same speed. A token can move across a blockchain within seconds, while the payment, ownership right or legal claim can still depend on banks, custodians, clearing systems and regulatory registries to complete settlement.

Tokenized deposit development remains at an early stage, leaving limited real world evidence for estimating how banks would respond to widespread adoption. Levy and Ramaswamy said market participants and policymakers should consider potential effects on payment systems, monetary policy transmission and implementation, differences across bank sizes and types, and the central bank’s role as lender of last resort in a heavily tokenized financial system.

The Sandbox has moved to unwind losses from a bridge exploit that hit SAND holders using the Base and BNB Smart Chain networks. In a post-mortem published this week, the blockchain gaming platform said it will repay eligible users 1:1 in Ethereum-based SAND after an Aug. 21 attack drained 14.744 SAND—valued at roughly $700,000 at the time—from an Ethereum vault.

The project emphasized that compensation will be funded from The Sandbox treasury, with no new SAND tokens minted. The reimbursement process is expected to begin within two weeks and remain open for an additional two-week window, while two centralized exchanges are set to distribute funds directly to customers who hold eligible bridged balances.

Key takeaways

• The Sandbox will compensate eligible SAND holders who had bridged tokens on Base or BNB Smart Chain with an equal amount of Ethereum-based SAND.
• Payments will come from The Sandbox treasury, explicitly without minting new tokens.
• The claims window is expected to open within two weeks and run for two weeks after that.
• The attacker’s method involved a configuration flaw that enabled control of bridge message verification, allowing minting of unbacked tokens.
• Compromised bridge contracts will be permanently retired; future bridges will use newly deployed contracts.

Bridge exploit triggers treasury-backed reimbursement

According to The Sandbox’s post-mortem, the Aug. 21 incident stemmed from an exploit involving the SAND bridge infrastructure connected to Base and BNB Smart Chain. The company said the attacker drained 14.744 SAND from an Ethereum vault, which at the time was worth about $700,000.

To make affected users whole, The Sandbox stated it will repay users who “legitimately held bridged SAND” on those networks with a 1:1 amount of SAND on Ethereum. Compensation will be sourced from the project’s treasury, and the company said it will not mint new tokens to fund the reimbursement.

For operational execution, The Sandbox indicated that the claims process should start within two weeks and continue for two more weeks. It also said two centralized exchanges hold more than 72% of eligible balances and will distribute compensation directly to their customers, reducing the need for all users to submit individual claims.

What the attacker did—and what was affected

The post-mortem describes the root cause as a configuration flaw in SAND’s bridge-related contracts on Base and BNB Chain. The issue allowed the attacker to become the sole verifier of incoming bridge messages—an abnormal condition that enabled the minting of unbacked tokens.

The Sandbox confirmed that the drained amount was about 14.7 million SAND tokens. While that figure is large in absolute terms, the company noted it represented approximately 0.5% of SAND’s 3 billion maximum supply.

The impact was not uniform across all networks connected to SAND. Although the exploit resulted in more than 339 trillion unbacked SAND being minted on the two impacted networks, The Sandbox said those tokens have been isolated. In its description, the unbacked tokens cannot be bridged or redeemed, limiting the practical risk of continued circulation.

Separately, the company said SAND on Ethereum and Polygon was unaffected.

Compromised contracts retired; future bridges to use new deployments

Beyond compensating users, The Sandbox said it would address the technical vulnerability at the source. The compromised bridge contracts will be permanently retired, according to the post-mortem.

The company added that any future bridges from Base or BNB Chain would rely on newly deployed contract versions. That change matters for users because it reduces the chance that attackers can reuse the same misconfiguration or interface behavior to repeat similar minting and drainage patterns.

At the same time, the arrangement leaves an important question for holders: how quickly and transparently new bridge contract deployments can be audited, monitored, and integrated across exchanges and user workflows. While the immediate risk of redeemable tokens appears constrained by The Sandbox’s statement that unbacked tokens are isolated, bridge security typically depends on ongoing contract monitoring and operational checks—especially when liquidity and user balances are concentrated across centralized platforms.

Market reaction and what holders should monitor

At the time The Sandbox published the update, SAND was trading at roughly $0.04, down 10.4% over the prior seven days, according to CoinGecko.

Token-price moves around major exploits can reflect broader investor concerns—ranging from temporary liquidity issues to general trust in bridge infrastructure—rather than only the direct magnitude of drained funds. In this case, the project’s plan to reimburse eligible holders 1:1 using treasury funds is designed to blunt that uncertainty, particularly for users who bridged via Base or BNB Smart Chain.

Looking ahead, the key variables for impacted SAND holders will be whether eligible balances are identified accurately by the exchanges and the project, how smoothly the claims process runs for the remaining users, and whether the newly deployed bridge contracts are integrated without introducing new failure modes. The coming weeks should also clarify whether any additional operational or technical findings emerge after the initial post-mortem.

For now, users should watch the start of the reimbursement window and follow The Sandbox’s guidance on eligibility, while monitoring any updates on the newly deployed bridge contract approach—because that is where long-term bridge safety will be tested after an exploit like this.

The Sandbox has pledged to reimburse eligible SAND holders 1:1 after an Aug. 21 bridge exploit drained about 14.7 million tokens worth roughly $700,000 from an Ethereum vault.

According to The Sandbox’s Aug. 27 post-mortem, users who legitimately held bridged SAND on Base or BNB Smart Chain before the attack will receive an equivalent amount of Ethereum-based SAND. The project plans to cover the payments from its treasury without minting new tokens.

Claims are expected to open within two weeks and remain available for another two weeks. Two centralized exchanges account for more than 72% of the eligible SAND balances, and The Sandbox said the exchanges will distribute replacement tokens directly to affected customers.

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The Sandbox will repay SAND holders from its treasury

The repayment plan covers legitimate bridged SAND balances that existed on Base and BNB Smart Chain before the exploit. Eligible users will receive SAND issued on Ethereum, replacing the tokens affected by the compromised bridge infrastructure.

The Sandbox said its treasury already holds the tokens required for the process, meaning the compensation will not increase SAND’s circulating or maximum supply. Users who held eligible balances through the two centralized exchanges handling most of the affected tokens will not need to submit individual claims.

For other holders, the project plans to launch a claims portal once the required infrastructure is ready. The two-week submission period is expected to begin within two weeks of the post-mortem, though the project did not provide a specific opening date.

The compensation plan follows an attack that targeted the contracts responsible for moving SAND between Ethereum and Base and BNB Smart Chain. While the exploiter was able to create an enormous quantity of unbacked SAND on the destination networks, the project said the damage to assets backing legitimate bridged tokens amounted to about 14.7 million SAND.

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The stolen amount represented roughly 0.5% of SAND’s maximum supply of 3 billion tokens.

Configuration flaw gave the attacker control of bridge verification

The Sandbox traced the incident to a configuration problem in the SAND contracts deployed on Base and BNB Smart Chain. The flaw allowed the attacker to become the sole verifier for incoming bridge messages, giving the address the ability to approve fraudulent messages without the authorization normally required by the bridge.

With control of that verification process, the attacker could mint SAND on the destination chains even though corresponding tokens had not been legitimately locked on Ethereum.

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More than 339 trillion unbacked SAND tokens were eventually minted across Base and BNB Smart Chain, according to the post-mortem. The Sandbox said the fraudulent supply has since been isolated and cannot be bridged back to Ethereum or redeemed against legitimate SAND reserves.

SAND deployed directly on Ethereum and Polygon was not affected by the configuration flaw.

The distinction between legitimate and unbacked tokens is central to the reimbursement process because bridge systems commonly depend on assets being locked on one network before a corresponding representation is issued elsewhere. A crypto.news explainer published Aug. 3 detailed how lock-and-mint and related bridge designs rely on verification mechanisms to ensure destination-chain assets remain backed by value held elsewhere.

Crypto.news previously reported that bridge exploits have resulted in more than $4 billion in losses since 2021, with failures involving validator credentials, message verification and smart contracts among the methods attackers have used to compromise cross-chain infrastructure.

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Compromised SAND bridges will be permanently retired

Following the Aug. 21 attack, The Sandbox decided not to restore the affected Base and BNB Smart Chain bridge contracts. Both will instead be permanently retired.

Any future bridge connecting SAND with either network would require newly deployed contracts, according to the project. The Sandbox did not provide a timetable for restoring bridge access to Base or BNB Smart Chain.

Similar decisions to isolate or replace compromised bridge infrastructure have followed several attacks this year. In June, Humanity Protocol disclosed losses exceeding $36 million after attackers obtained administrative keys and took control of bridge systems spanning Ethereum and BNB Smart Chain.

The attackers in that incident were able to drain tokens from the Ethereum bridge and mint additional H tokens on BNB Smart Chain. A subsequent forensic investigation traced the compromised keys to a malware-infected developer machine that contained backups for seven private keys.

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Another bridge incident in July hit Wanchain infrastructure connecting Cardano and BNB Chain. Blockchain security firm BlockSec said roughly 515 million NIGHT tokens were removed from the Cardano-side treasury in the Wanchain bridge exploit, worth about $9 million at the time. Midnight said its core network remained secure and described the incident as isolated to the bridge infrastructure.

Bridge exploits have continued through 2026

Cross-chain infrastructure has faced a series of attacks during 2026 involving different verification and security failures.

Axelar disabled bridge connections with Secret Network in June after an exploit resulted in approximately $4.7 million in losses. The incident affected Axelar-bridged assets on Secret Network while Axelar said its core protocol remained unaffected.

A month later, AFX suffered a $24.15 million USDC loss through a bridge operated by the trading protocol. The affected infrastructure was separate from Arbitrum’s native bridge, and the attacker subsequently moved the stolen USDC to Ethereum before converting it into about 12,467.5 ETH.

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AFX later prepared a goodwill plan for users after its investigation linked the attack to a social engineering campaign that compromised internal development infrastructure. The protocol said it rebuilt key infrastructure and introduced new security measures following the incident.

The Sandbox’s reimbursement process is expected to begin once its claims system is ready. Eligible balances held through the two centralized exchanges will be handled directly by those platforms, while remaining holders will have two weeks to submit claims after the portal opens.

SAND was trading near $0.04 at the time of the post-mortem, down about 10.4% over the previous seven days.

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