The Trump administration’s plan for a Strategic Bitcoin Reserve has run into legal and agency questions.

Bloomberg reported that officials are still deciding which department can hold and manage the government’s Bitcoin.

The issue centers on whether the Treasury has clear legal authority to control a volatile digital asset as a federal reserve asset. The Commerce Department has also emerged as a possible home for the reserve, while the Justice Department’s Office of Legal Counsel works with both agencies on a lawful structure. The review keeps the plan active, but it also shows that control of the reserve remains unsettled.

Treasury role faces legal review

Trump’s March 2025 executive order said the Treasury secretary should create an office to manage the Strategic Bitcoin Reserve. The order said the reserve would hold BTC forfeited through criminal or civil proceedings, including assets already controlled by federal agencies.

The order also said government BTC placed in the reserve should not be sold and should be kept as reserve assets. Still, the same order required Treasury to review legal and investment issues, including where the accounts should sit and whether new legislation was needed to operate the reserve.

White House says structure is still under review

A White House spokesperson told CoinDesk that the administration continues to evaluate the best structure for the Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile. 

“To deliver on the president’s vision, the Trump administration continues to evaluate the best structure,” Liz Huston said.

As previously reported by crypto.news, White House crypto adviser Patrick Witt said in May that officials had made progress on legal and custody safeguards. He called the work a “breakthrough” and said an announcement was expected in the coming weeks, though the latest report shows that the structure remains under review.

Congress and custody remain key questions

The latest report shows that the reserve still depends on more than a presidential order. As previously reported by crypto.news, the U.S. already has a Bitcoin reserve on paper, but the main question is whether it can become a working program with clear custody and purchase rules.

Lawmakers have also tried to turn the reserve into law. crypto.news previously reported that the American Reserve Modernization Act would create a Treasury-run Bitcoin reserve, require a 20-year holding rule, and call for audits, proof-of-reserve reports, and reviews of budget-neutral purchase methods. No federal bill has completed passage, leaving executive agencies to solve the custody issue for now. 

BitcoinTreasuries data showed the U.S. government holding 328,372 BTC, worth about $20.7 billion as of July 7. The tracker ranks the U.S. as the largest known government holder of Bitcoin, ahead of China, the United Kingdom, Ukraine, and El Salvador.

That large holding gives the reserve plan weight, but the new legal review shows the structure is not settled. 

For now, the debate is not about buying more Bitcoin. It is about who can legally control seized BTC, how federal agencies should store it, and what rules should govern a reserve built from forfeited assets.

TeraWulf began as a bitcoin miner, running warehouses of specialized computers to earn newly issued coins, a business whose margins tightened after last year’s halving cut the mining reward in half.

Like several of its peers, it has pointed its power capacity and sites at hosting AI computing instead, where a single tenant on a long lease offers steadier income than the volatile economics of mining. The company still runs a bitcoin operation, but the Anthropic lease and its wider pipeline may now define its value.

Meanwhile, TeraWulf added it will sell its entire 50.1% stake in the Abernathy data-center joint venture in Texas to a group led by its partner Fluidstack for about $530 million, monetizing roughly $450 million of invested capital at a premium and freeing cash to expand data centers it owns outright.

The deal fits a rotation CoinDesk has tracked all year. As of March 2026, Bitcoin miners sold more than 15,000 coins from peak holdings and signed over $70 billion in AI computing contracts, chasing the steadier margins of the AI trade, the same shift of capital toward artificial intelligence that has pulled money out of crypto through a losing first half.

The lift stood out against a soft day for bitcoin itself. The token slipped toward $61,900 on Monday after Strategy disclosed the sale of 3,588 bitcoin for about $216 million, a sharp step up from the 32 coins it sold weeks ago.

“The institutional bid has all but vanished,” said Yusuf Fakhro, partner at ARP Digital, pointing to CME futures open interest at a 32-month low and a term structure at its tightest since early 2023.

He added that six-month options skew, a measure of how much traders pay to protect against a drop, has spiked to its fourth-highest on record, with the only parallels in June and November 2022, both of which came near major cycle bottoms.

When downside insurance gets this expensive, he said, the market is paying up for protection just as the worst may already be priced in.

Oil re-entered the picture overnight. Brent crude rose 0.6% to about $72.45 a barrel after a laden liquefied natural gas carrier was struck by a projectile near the Omani coast as it left the Strait of Hormuz, according to Bloomberg, a fresh attack that tests the peace deal reached in late June.

Energy shocks tied to the Iran conflict drove crypto’s selling earlier this year before the truce eased them, and a renewed flare-up is the kind of macro risk that had faded from the market’s view.

Elsewhere, Asian shares fell as technology stocks came under renewed selling, with South Korea’s Kospi down 6.7%, according to Bloomberg. Samsung Electronics slid 8.3% even after quarterly profit surged, and SK Hynix fell the same as it began marketing a U.S. listing. U.S. futures pointed lower, suggesting Monday’s Wall Street rebound may not carry.

US President Donald Trump says he got involved in crypto “for politics” and became pro-crypto after seeing how much money the industry was making.

At a press conference in the Oval Office on Monday to announce “Trump Accounts,” an investment account for children under 18, Trump was asked whether the accounts would allow for Bitcoin (BTC).

“I’ve become a big crypto guy only for one reason: If we don’t have it, China’s going to have it,” Trump answered. “I’m a fan, I wasn’t initially, I didn’t know much about it, but, for some of my first term, I wasn’t much involved, and I watched it grow, and it’s a huge industry.”

“I got involved in it a little bit for politics,” Trump added. “I realized there are a lot of people that love crypto.”

The comments shed new light on why Trump pivoted his stance towards crypto. In his first term, Trump said he was “not a fan” of crypto and called Bitcoin “a scam.” Since then, he and his family have built deep business interests in crypto, and Trump has faced criticism for his pro-crypto stance while being connected to the industry.

“As a businessman, I see a lot of money starting to come in with Bitcoin and, you know, the different forms, and I said: ‘This thing’s got a lot of life,’ and then I hear China was going to make a heavy move on it,” he added. “If we didn’t do it, China would do it.”

Trump’s pro-crypto pivot attracted the help of the crypto lobby, which spent around $170 million in the 2024 election to help elect mostly Republicans, and is set to spend even more backing pro-crypto candidates in the November midterms.

Donald Trump speaks to reporters about “Trump Accounts” at the White House on Monday. Source: YouTube

Trump says he doesn’t talk to family about crypto interests

Trump said he doesn’t talk to his family about their involvement in crypto, an area that made him more than $1.4 billion last year, according to financial disclosures released June 30.

Trump and his sons are listed as co-founders of World Liberty Financial, a crypto platform that generated a large portion of Trump’s crypto-related income last year, but the president said his interest in crypto is “not a question of a personal thing.”

Related: Donald Trump says ‘nothing wrong’ with $1.4B crypto windfall while in office

“I let my kids do whatever the hell they do. I don’t talk to them, ever, talk to them about it,” Trump said.

Trump claimed that the Biden administration “dropped all investigations” related to crypto when he “went very pro-crypto.” 

However, under the Trump administration, the Securities and Exchange Commission stopped multiple investigations and withdrew or settled enforcement actions filed against crypto companies, some of which had donated to Trump.

“Every time I see a crypto guy where they dropped an investigation, I said: ‘You’re lucky I’m president,” Trump said.

Magazine: SBF will never get a pardon, Trump peace deal boosts Bitcoin: Hodlers Digest

The United Nations Development Programme has expanded its partnership with the Stellar Development Foundation after blockchain payment pilots cut aid distribution costs from 10% to 2% and kept payments running during network outages.

The United Nations Development Programme announced Monday that it has signed a new agreement with the Stellar Development Foundation (SDF) following 16 months of blockchain payment pilots across multiple countries.

South Korea’s Broadcasting, Media and Communications Review Committee has opened a formal review process involving Polymarket, signaling that regulators are preparing to assess whether the prediction market platform violates local gambling rules. The committee said it will first hear Polymarket’s position before deciding on a corrective request tied to gambling-related concerns.

According to a machine-translated version of the committee’s statement, the regulator chose to “provide an opportunity for Polymarket to submit its opinion to thoroughly verify the legality of Polymarket and the way the service is operated.” The outcome could determine whether additional enforcement steps follow, depending on how regulators view the platform’s operating model under Korean law.

Key takeaways

• South Korea’s media and communications review body will hear Polymarket’s response before deciding on corrective action over alleged gambling concerns.
• The review reframes scrutiny from individual users to the platform’s legality and operating practices.
• South Korea’s National Gambling Control Commission Act gives authorities power to monitor and combat “illegal gaming businesses,” including certain online speculative gambling services.
• Polymarket reports geoblocking restrictions across 33 countries, including major markets such as the US, UK, and several EU states.

Regulators focus on how the platform operates

The committee’s decision to request Polymarket’s input marks a notable shift in how the issue is being handled. Earlier attention in South Korea centered on whether local users had engaged with Polymarket markets in ways that could be considered illegal gambling.

Instead, the committee’s current process targets the platform itself—specifically, whether its service and operations align with South Korean legal standards. That distinction matters for Polymarket and other prediction-market operators because a platform-focused action can affect access, compliance obligations, and how services are structured at a system level, not only how individual participants behave.

South Korea’s National Gambling Control Commission Act defines “illegal gaming business” broadly enough to cover online services that enable speculative gambling, granting regulators authority to monitor and take steps against such activity. In practice, that means regulators are likely to evaluate factors such as user access, the presentation of outcomes, and the nature of what participants can wager or trade.

What the law implies for prediction markets

South Korea’s legal framework distinguishes between individual gambling activity and operating gambling venues. Under the Criminal Act referenced in prior reporting, gambling can be punishable by a fine of up to 10 million won (about $6,500). More severe penalties can apply for habitual gambling, with punishment potentially including up to three years in prison or a fine of up to 20 million won.

Operating a gambling venue for profit carries even heavier penalties, including up to five years in prison or a fine of up to 30 million won. While prediction markets aren’t automatically categorized the same way in every jurisdiction, regulators may still treat certain features—such as speculative participation tied to real-world outcomes—as overlapping with gambling definitions.

For platforms like Polymarket, this creates a compliance challenge: even if a service frames itself as a prediction market, regulators may examine whether the user experience functions like betting. As South Korea’s committee moves to verify “legality” and “the way the service is operated,” the practical question becomes how regulators interpret those features under existing statutes.

Background: earlier probe into local users

The review arrives after an earlier police investigation involving Polymarket users in South Korea. On June 5, the Gangwon Provincial Police launched what local reporting described as the country’s first illegal gambling probe into local Polymarket users, with the request reportedly coming from South Korea’s National Police Agency.

That user-focused investigation set the stage for broader scrutiny. Now, the committee’s plan to hear Polymarket indicates that regulators may seek to connect any alleged gambling concerns to the platform’s design and operating practices—an approach that could lead to corrective measures if the service is deemed noncompliant.

Polymarket says it already restricts access

Polymarket says its restrictions are designed to meet a range of compliance requirements, including sanctions-related rules, local financial regulations, gambling and prediction market laws, anti-money laundering obligations, and Know Your Customer (KYC) procedures.

The company also states that it applies geofencing not only at the country level but within some regions that would otherwise be accessible. Its documentation indicates that Polymarket’s platform is restricted in 33 countries, including the United States, the United Kingdom, France, Germany, Brazil, Singapore, Japan, and Australia. Polymarket’s materials also list additional restricted areas within those accessible jurisdictions, such as parts of Canada and regions in Ukraine.

For investors and users, this matters because regulators often assess whether geoblocking and compliance controls are sufficient—and whether they are implemented consistently. If South Korea concludes that existing restrictions do not adequately prevent gambling-like participation or otherwise violate local rules, Polymarket may face pressure to adjust its service availability, verification steps, or market mechanics.

At the same time, the presence of geoblocking elsewhere does not guarantee freedom from enforcement in a specific country. The committee’s review suggests that South Korea intends to evaluate the legality of Polymarket on its own terms, regardless of how other jurisdictions approach similar platforms.

What to watch next in South Korea

With the committee set to review Polymarket’s response before issuing a final decision, the next key signal will be what arguments the platform presents and how the regulator frames any potential corrective request. Observers should also pay attention to how South Korea’s actions align with its earlier police probe—specifically whether enforcement shifts further toward platform-level restrictions or remains focused on individual compliance.

French authorities have uncovered a $1.8 million crypto fraud involving a fake real estate deal targeting a wealthy couple.

Authorities have also arrested a mother and her son in connection with the fraud after a year-long investigation.

Modus Operandi

According to the authorities, the suspects stole $1.8 million in cryptocurrency through an elaborate yet fraudulent real estate transaction. The mother and son duo were arrested at a rented property in southern France on June 25. Investigators said they targeted a wealthy couple who had listed a $10 million villa for sale in the spring of 2025.

The fraudsters claimed to represent an Italian billionaire and invited the seller to Milan for further negotiations. They made a substantially higher offer than the listed price but asked the seller to prove they owned sufficient crypto assets to cover the $1.8 million in transaction fees.

The suspects gained access to sensitive wallet information, account details, and private keys during a second meeting in Milan. According to the authorities, they requested access to the cryptocurrency wallet under the guise of verifying assets. Unbeknownst to the victim, the fraudsters used hidden cameras to record sensitive information, including the private keys. Once the private keys were compromised, the fraudsters quickly transferred the crypto assets from the wallet.

Prompt Action

The suspects used false identities and frequently moved across the country to throw authorities off their trail and complicate the investigation. They also have prior criminal records related to fraud. However, they denied all allegations against them during questioning. The suspects are scheduled to appear before the Draguignan Criminal Court on September 1 and will likely be charged with organized fraud and inability to account for the source of funds.

Attacks On Cryptocurrency Holders Rising

While this specific case has been classified as a “rip-off” scam rather than violent extortion, it highlights the growing risks faced by cryptocurrency holders and how fraudsters are using real estate fraud to target them. France’s Interior Ministry has recorded 77 crypto-related cases in 2026, including extortion, kidnapping, and unlawful detentions; this is a substantial increase from 45 recorded in 2025.

French Interior Minister Laurent Nuñez called the cases “serious in nature” but reiterated that emergency security measures implemented over the past year are starting to show results. Nuñez added that law enforcement agencies have arrested 200 individuals, while over 724 industry figures have joined France’s immediate identity verification platform.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

As crypto adoption expands beyond early retail users and into institutional channels—and as agentic AI finance begins to introduce new expectations for “always-on” throughput—Layer-1 blockchains are likely to face a familiar trade-off: delivering more speed and capacity may tempt builders to centralize parts of their systems. Injective CEO Eric Chen warned that this pressure is coming, and that the industry will have to find scaling paths that do not undermine what makes a blockchain a blockchain.

Speaking on Cointelegraph’s Chain Reaction podcast, Chen framed the challenge as an effort to increase performance while protecting the core guarantees users associate with decentralized networks: resilience, credibility, and the absence of a single controller.

Key takeaways

• Scaling demands are increasing as institutional adoption and AI-driven finance push networks toward higher throughput and faster finality.
• Centralization can look like the simplest route to performance, but it also introduces single points of failure.
• Chen argues there are scaling opportunities that improve capacity without necessarily reducing block time.
• The blockchain trilemma remains a practical constraint: improving scalability too aggressively can come at the expense of decentralization or security.

Why speed and capacity could pull chains toward centralization

Chen said the market is effectively asking Layer-1 networks to provide “faster speeds” or “more block space” to support higher transaction volumes. That demand, he suggested, will test whether blockchains can scale in ways that preserve their foundational principles rather than trading them away for efficiency.

In his view, the goal is not to reject performance improvements, but to “find scaling opportunities” that do not compromise the “fundamental pillars” defining decentralized blockchains.

This tension matters because one of crypto’s original selling points was replacing trust in intermediaries with systems that can operate without a central party coordinating transactions. When throughput becomes the top priority, the temptation to consolidate control—whether operationally, infrastructurally, or at the protocol level—tends to rise.

The operational risks of “the easy way out”

Chen cautioned that centralized design is often the fastest engineering solution. He described scenarios in which all users rely on a shared data warehouse or where a small set of entities effectively determine network behavior.

The problem, according to Chen, is that such an architecture can create a single point of failure. If one critical server or decision-making component encounters a fault, it can cascade into broader service outages—potentially stopping the chain’s activity instead of allowing it to continue under independent validation.

For networks that market themselves on resilience and distributed control, that trade-off becomes especially consequential as usage grows and operational dependencies expand.

Injective’s framing: optimize the whole system, not just block time

Chen discussed Injective, which he described as an interoperable Layer-1 blockchain built for DeFi applications. For his team, the focus is on “figuring out ways to optimize the entire chain,” while exploring other scaling routes that do not necessarily require reducing block time.

One such approach he pointed to is what he called “scaling venues.” The basic idea is to create “dedicated zones” and use Layer-2 scaling to route or process high-demand transactions so the most active traffic can still get through without forcing the entire base layer into the most extreme performance configuration.

That distinction is important for investors and users evaluating roadmap narratives: if performance gains come primarily from architectural layering (and traffic management) rather than from concentrating control, the result can be a better match between throughput expectations and decentralization goals—though the actual implementation details determine how much decentralization is retained.

The blockchain trilemma still limits how much can be “optimized at once”

Chen’s comments also echoed the long-standing blockchain trilemma: the ideal network is expected to provide security, decentralization, and scalability, but maximizing all three simultaneously is difficult.

In the classic framing, decentralization means there is no single point of control and many independent parties validate the network. Security means the system is resistant to manipulation, fraud, and attacks. Scalability means the network can handle high transaction volumes quickly.

Chen warned that pushing too hard on scalability can force compromises elsewhere—particularly decentralization. In other words, if a blockchain’s design prioritizes throughput so aggressively that validation participation narrows, performance improvements may arrive alongside reduced network independence, even if the chain appears faster on the surface.

The takeaway is less about whether scalability is achievable and more about what form it takes. A network can increase capacity by adjusting how transactions are processed, how consensus is supported, and how load is managed. But each path tends to impose trade-offs that only become visible under real demand conditions.

Where the tension is heading next

Chen’s warning suggests that the next phase of Layer-1 competition may not be won solely by raw throughput metrics, but by how effectively teams scale while sustaining distributed validation and minimizing systemic dependencies. As institutional adoption and agentic AI finance intensify expectations for capacity, builders—and users—will likely watch closely for whether performance improvements come with a shift toward centralized control, or whether “scaling without compromise” can remain more than a slogan.

Layer-1 blockchains will come under increasing pressure to sacrifice decentralization for speed and efficiency as adoption of the technology grows, according to Injective CEO Eric Chen.

This pressure will come from the need to satisfy users’ desire for faster speeds or more block space for higher throughput, Chen told Cointelegraph’s Chain Reaction podcast on Monday. 

“In our mind, it’s essentially about finding scaling opportunities without compromising the fundamental pillars that define what a blockchain is,” he said. 

With blockchain adoption accelerating due to institutional adoption and agentic AI finance, this tension is about to be tested on a much larger scale. Part of crypto’s original pitch was to create a “trustless” financial system in which individuals could transact without relying on traditional intermediaries. 

Centralization comes with risks

Chen said centralizing is the easy way out — “it might be a very, very easy choice to move everyone in the same data warehouse, or literally have a leader validator that calls all the shots for everyone” — but warned this creates a single point of failure: “If that one server has a certain fault, the entire chain goes down.”

Related: DAOs may need to ditch decentralization to court institutions

Eric Chen chats with Ciaran Lyons on the Chain Reaction. Source: Cointelegraph 

Chen added that for Injective — an interoperable layer-1 blockchain designed for DeFi applications — it’s about “figuring out ways to optimize the entire chain,” and there are other opportunities to do this without reducing block time. 

One option he suggested was “scaling venues,” where there are “dedicated zones” and layer-2 scaling to ensure that all the high-demand transactions can make it through.

“It’s always a constant tug-of-war, and it’s about keeping the fundamental pillars and then kind of seeing where the space moves.”

The blockchain trilemma remains a challenge

It is said the perfect blockchain boasts three elements: security, decentralization and scalability. The principle of the blockchain trilemma is that it is only possible to fully optimize two of the three properties at once. 

Decentralization means no single point of control, with many independent participants validating the network. Security means resistance to attacks, fraud and manipulation. Scalability means the ability to handle high transaction volumes at speed.

Pushing too hard on any one, such as scalability, will result in sacrificing another, such as decentralization, Chen said. 

The blockchain trilemma. Source: OKX

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