The U.S. Securities and Exchange Commission kept Nasdaq PHLX’s proposed Bitcoin index options on hold after granting CME Group’s petition for a full Commission review. 

The SEC issued the order on July 29, and its Aug. 3 publication in the Federal Register set Aug. 24 as the deadline for written statements supporting or opposing the earlier approval.

The order does not decide whether CME’s jurisdictional challenge is correct. It accepts the matter for review and leaves the May 22 approval stayed until the Commission issues another order.

SEC review leaves Nasdaq Bitcoin options unable to launch

Nasdaq PHLX proposed cash-settled, European-style options under the ticker QBTC. The contracts would track the CME CF Bitcoin Real Time Index divided by 100. Final settlement would use the New York variant of the CME CF Bitcoin Reference Rate, also divided by 100.

The proposed rules set a 24,000-contract position and exercise limit. Unlike options on spot Bitcoin ETF shares, QBTC would reference an index tracking Bitcoin itself. That distinction created the central dispute because ETF shares are securities, while Bitcoin is treated as a commodity for federal derivatives regulation.

SEC staff approved the rule change through delegated authority on May 22. CME filed notice of its planned appeal on June 11, automatically staying that decision. It submitted its formal petition on June 18 and asked the commissioners to vacate the approval.

CME says the contracts belong exclusively under CFTC rules

CME argues that Bitcoin is a non-security commodity and an option based directly on Bitcoin’s value is a commodity option swap. On that basis, it says the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over the contracts.

The exchange operator called the SEC staff’s legal interpretation “erroneous” and argued that the Division of Trading and Markets exceeded its delegated authority. Those remain CME’s claims. The SEC’s review order did not endorse them or make findings on the merits.

CME also said the approval could expose its exchanges and clearing business to new regulatory costs while allowing a competing product. It asked the full Commission to withdraw the staff approval rather than await the separate CFTC exemption process.

Nasdaq says joint oversight offers a compliant route

The May approval took the opposite legal view. SEC staff reasoned that Dodd-Frank Section 717 could permit concurrent SEC and CFTC jurisdiction when the CFTC grants appropriate relief. Nasdaq also said the product could let spot Bitcoin ETF investors hedge exposure on a national securities exchange within the same margin framework.

However, SEC approval alone was never enough to begin trading. Nasdaq acknowledged that it must obtain all necessary CFTC exemptions, including relief allowing the Options Clearing Corporation to clear the contracts without registering as a CFTC derivatives clearing organization. OCC must also update its standardized options risk disclosure.

As previously reported, Nasdaq has continued expanding its crypto infrastructure by distributing exchange order-book data through Pyth. In related coverage, Nasdaq and CME partnered on crypto index futures tracking several digital assets. The current dispute is narrower because it concerns options tied directly to Bitcoin rather than Bitcoin ETF shares.

Aug. 24 filings will shape the SEC’s next decision

Interested parties now have until Aug. 24 to file statements. After reviewing those submissions, commissioners will determine whether the staff approval should stand. The order provides no deadline for a final Commission decision.

The case could affect more than QBTC. CME warned that approval could create a route for securities exchanges to list derivatives tied to other non-security commodities under SEC rules. That is a forward-looking legal argument, not an outcome established by the Commission.

For now, Nasdaq’s Bitcoin index options remain stayed. Even if the SEC later restores the approval, Nasdaq would still need the required CFTC relief and OCC approvals before listing the contracts.

South Korea extended a long-running outflow trend as stablecoins continued to leave the country for offshore trading platforms. In June, the nation recorded net stablecoin outflows of 560.3 billion won (about $367 million), keeping South Korea’s streak of monthly net outflows at 18 consecutive months.

The latest numbers, reported by Yonhap News Agency using data from the Financial Supervisory Service (FSS), point to large-scale transfers by South Korea’s biggest crypto venues. Yonhap said the five major exchanges—Upbit, Bithumb, Coinone, Korbit and Gopax—sent 2.7 trillion won (about $1.81 billion) in stablecoins overseas in June while receiving 2.2 trillion won (about $1.44 billion) from foreign platforms.

Key takeaways

• June net stablecoin outflows from South Korea totaled 560.3 billion won (about $367 million), extending 18 straight months of monthly net exits.
• South Korea’s five largest exchanges collectively transferred 2.7 trillion won in stablecoins offshore in June while receiving 2.2 trillion won from abroad.
• Yonhap reported that demand for products unavailable or restricted domestically—such as certain derivatives, tokenized real-world assets (RWAs), DeFi, and staking—was cited as a driver of the transfers.
• Opposition lawmakers and regulators are calling for stronger oversight and updated investor protection rules as cross-border activity continues.
• Policy proposals discussed alongside the outflows include interim stablecoin licensing guidance and potential phasing of stablecoin regulation before a broader Digital Asset Basic Act is finalized.

Stablecoin exits keep growing despite ongoing regulation work

According to Yonhap, the June figure comes directly from FSS data shared with a lawmaker. The data was obtained through People Power Party lawmaker Lee Jong-wook, who has repeatedly raised concerns about how the government supervises cross-border crypto activity.

While the net outflow headline is negative, the underlying exchange-level flows highlight a more nuanced picture. Yonhap said local exchanges exported stablecoins to offshore platforms at a higher pace than they imported them—2.7 trillion won sent versus 2.2 trillion won received—resulting in the net outflow position.

Market participants quoted by Yonhap tied the transfers to practical constraints for users operating within South Korea’s market structure. They pointed to demand for services or token products that are restricted, not yet available, or otherwise limited on domestic venues. Those categories included overseas derivatives, tokenized real-world assets (RWAs), decentralized finance, and staking products.

Lawmakers push for a fresh look at investor protection

The stablecoin outflows have drawn renewed pressure on regulators to address investor protection gaps. Lee Jong-wook urged the government to re-examine its supervisory framework for how investors are protected when activity shifts offshore and users access services subject to different rules and oversight.

As reported by The Korea Times, Lee said authorities must “comprehensively examine” investor protection and supervisory frameworks and “move swiftly to improve regulations” in response to continuing stablecoin outflows.

The core tension for policymakers is straightforward: if domestic rules or product availability are slower to develop than offshore options, users may route capital abroad rather than use locally supervised services. That dynamic can leave regulators chasing activity after it has moved to less directly controlled venues—especially when stablecoins are used as on-ramps for broader crypto strategies.

Proposed stablecoin rules and reporting expansions

The outflows are unfolding while South Korea works toward a fuller legal framework for digital assets. Cointelegraph reported earlier that Thursday’s policy report recommended authorities introduce interim licensing guidance and phase in stablecoin regulations before the Digital Asset Basic Act is finalized, rather than waiting for the full law to take effect.

Under the proposed approach referenced by Cointelegraph, the Digital Asset Basic Act would aim to create South Korea’s first comprehensive digital asset framework, covering stablecoin issuance, disclosure standards, and market activity rules. However, the report also underscores that lawmakers have yet to reconcile multiple proposals—particularly disagreements about which institutions would be authorized to issue won-pegged stablecoins, a point flagged as a contributor to delays.

Separately, Cointelegraph noted that South Korean regulators have sought to expand reporting requirements for crypto transfers. On June 22, the Financial Intelligence Unit (FIU) proposed extending Travel Rule reporting requirements to transactions below 1 million won (roughly $650). The Travel Rule proposal is part of an effort to improve traceability of crypto transfers across jurisdictions, reducing the ability to move value without the expected reporting coverage.

Yonhap’s coverage also reflected the FIU’s broader concern: it urged stronger action against unregistered overseas exchanges serving South Koreans. The FIU argued that licensing and supervision can vary widely across jurisdictions, creating opportunities for regulatory arbitrage—an issue that the continuing stablecoin outflows bring into sharper focus.

What investors and traders should watch next

As South Korea’s stablecoin outflow streak continues, the next milestones will likely be the details of how interim stablecoin licensing is implemented and how quickly reporting rules and enforcement measures are tightened for cross-border activity. For market participants, the key question is whether regulatory changes will narrow the gap between what users can access domestically versus offshore—without simply pushing activity into new, less supervised channels.

Prediction markets recorded $50.59 billion in combined monthly trading volume in July, setting a new high across Kalshi, Polymarket and Polymarket US, according to data published on Aug. 3.

The total rose 7.8% from the dashboard’s revised June figure of $46.95 billion. Kalshi remained the largest venue with $37.7 billion, while Polymarket’s international and U.S. platforms generated a combined $12.9 billion. The figures measure taker notional volume rather than exchange revenue or money deposited by customers.

Prediction market volume reaches a new monthly record

Kalshi’s July volume increased about 14% from the previous month. The platform supplied roughly 74.5% of the three exchanges’ combined total, extending its lead over both versions of Polymarket.

The latest data also revise the comparison with June. The Block initially reported $44.8 billion across the three venues shortly after June ended, including $31.5 billion from Kalshi. The current dashboard uses a higher June baseline of $46.95 billion, showing that historical totals were updated as more trading data became available.

Notional volume should not be treated as platform income. Traders can buy and sell the same contract several times before settlement, causing the recorded volume to rise without an equal amount of new capital entering the exchange.

Therefore, July’s record shows greater contract turnover and liquidity. It does not establish that traders deposited $50.6 billion or that the three platforms earned an equivalent amount.

Polymarket US grows while offshore activity falls

Polymarket US posted the strongest monthly growth of the three venues. Its volume increased 54% to $5 billion. In contrast, volume on Polymarket’s international platform declined 26% to $7.9 billion.

Combined volume across the two Polymarket businesses fell from about $14 billion in June to $12.9 billion in July. The U.S. platform therefore gained activity without fully offsetting the drop recorded by the international exchange.

Polymarket US opened more widely to eligible U.S. users after removing its initial app waitlist in May. The CFTC lists QCX, operating as Polymarket US, as a designated contract market. Kalshi has held the same federal designation since November 2020.

The opposing volume trends are consistent with some demand shifting toward Polymarket’s regulated U.S. exchange. However, monthly totals cannot prove that individual traders moved between the two platforms.

Rutgers University statistician Harry Crane previously estimated that about 30% of Polymarket’s offshore volume could originate from U.S. users. His wider estimated range was 19% to 48%. Crane stressed that blockchain transactions do not reveal traders’ locations, making those figures indirect estimates rather than verified customer data.

World Cup trading boosted volume before activity cooled

The FIFA World Cup, which ran from June 11 through July 19, provided a large group of frequently settling contracts. Kalshi’s market on the final between Spain and Argentina recorded approximately $1.89 billion in volume. Spain won the match 1–0.

Chainalysis separately estimated that World Cup-related blockchain prediction markets generated $20 billion from January through the tournament’s conclusion. About 400,000 wallets produced $5.7 billion during the five-week competition, while World Cup markets represented approximately 63% of prediction-market activity during that period.

Those figures are not directly comparable with the $50.6 billion monthly total. Chainalysis examined on-chain markets, while The Block’s dataset combines centralized Kalshi activity with Polymarket’s international and U.S. venues.

As crypto.news previously reported, Chainalysis also found that activity exceeded $300 million on the day of the final. Its $20 billion estimate included qualifying and pre-tournament contracts beginning in January, rather than trading conducted only during the tournament.

Open interest across Kalshi and the two Polymarket platforms fell from around $2 billion near the start of July to approximately $1.2 billion by month-end. The decline shows that many positions settled or closed as the tournament ended, even though total monthly turnover reached a record. Earlier weekly data had already shown sports activity retreating from its early-July peak.

U.S. court fights could shape August activity

The platforms reached the volume record while facing conflicting decisions over whether federal derivatives regulation blocks state gambling enforcement.

On July 31, New York sued Kalshi and accused it of running an “illegal, unlicensed gambling operation.” The state is seeking an order stopping the platform from offering unlicensed event contracts, along with fines, forfeiture and customer restitution. Those claims remain allegations and have not produced a final judgment.

Four days earlier, a Minnesota federal judge temporarily stopped the state from enforcing its prediction-market law against Kalshi and Polymarket US. The court found that the platforms were likely to succeed on part of their federal-preemption case. However, the judge warned that not every event contract necessarily qualifies as a federally regulated swap and that any permanent order could be narrower.

In related coverage, crypto.news reported that the Minnesota injunction allows both platforms to continue operating while the underlying cases proceed. The ruling did not settle whether states can regulate sports or entertainment contracts that fall outside the federal swap definition.

August data will provide the first full-month test without the World Cup. The next question is whether sports, politics and economic contracts can preserve July’s trading pace while the New York and Minnesota cases move through court.

If you’ve been tracking crypto markets, you’ve likely seen analysts flag bitcoin’s BTC$62,731.27 200-week moving average (200W MA) as a key inflection line where the broader trend can turn decisively higher. This line represents bitcoin’s average closing price over roughly four years.

Strategy is now tracking the same indicator, along with bitcoin’s premium (or discount) to that average. The firm’s Founder, Michael Saylor, announced it on X on Sunday, reinforcing the long-term average as a pivotal level for traders and investors alike.

“We’re now tracking Bitcoin’s 200-week moving average and its premium to that level on http://Strategy.com. Since the 200W MA became available, Bitcoin has traded above it 92% of the time. Today, it sits almost exactly on the line,” Saylor said Sunday on X.

However, in the hours since the post, prices have come under pressure, likely over concerns about a delay in the passage of the long-awaited Clarity Act, which is expected to unlock a significant institutional bid for digital assets. According to reports, the Senate did not list the Clarity Act in Monday’s agenda.

BitGo CEO Mike Belshe challenged Anthropic’s Claude models on Aug. 1 by publishing a Bitcoin address holding 100 BTC and inviting the AI system to move the funds. 

BitGo’s official website identifies Belshe as its co-founder and chief executive.

Belshe framed the wager as a response to Anthropic’s July 30 disclosure that Claude models accessed three real organizations during cybersecurity evaluations. He wrote that there had been “enough with the ‘we created a hacking monster’ games” and called for a real-world demonstration.

BitGo’s 100 BTC wallet remains untouched

The address received 100 BTC on July 31, according to publicly indexed blockchain reports. On-chain checks cited through Aug. 2 showed the full balance remained at the address with no outgoing transaction.

The absence of movement does not establish that Claude tried and failed. Belshe’s post did not describe an evaluation setup, grant access to BitGo systems or identify which Claude model should participate. It instead created a public, observable target whose balance can be monitored through the Bitcoin network.

Meanwhile, Anthropic said it found three incidents after reviewing 141,006 evaluation runs. The cases involved Claude Opus 4.7, Mythos 5 and an internal research model. A misunderstanding with evaluation partner Irregular left test machines connected to the internet, even though prompts told the models they were inside sealed simulations.

The models then used basic techniques, including weak passwords and unauthenticated endpoints, against real infrastructure they treated as part of capture-the-flag exercises. Anthropic said the models did not deliberately escape or pursue independent goals. It described the episodes as closer to an “operational failure” than a model alignment failure. The models also lacked the standard classifiers and monitoring used in Anthropic’s publicly available products.

In the most serious case, Opus 4.7 obtained credentials and reached a database containing several hundred production records. Mythos 5 separately published a malicious package to the public PyPI registry. Anthropic said the package remained available for about one hour and ran on 15 real systems before its removal.

The Claude challenge is not a like-for-like test

Publishing a Bitcoin address does not provide the credentials needed to spend its funds. Bitcoin transactions require valid cryptographic signatures produced with the relevant private keys. BitGo’s technical documentation says its Bitcoin multisignature wallets generally require two of three independent keys to authorize a transaction.

Claude would therefore need access to a signing environment, key material or an exploitable operational weakness. The address alone supplies none of those. Moreover, the exact signing policy behind this particular unspent output cannot be confirmed from Belshe’s post alone, even though he identified it as a BitGo wallet.

That makes Belshe’s challenge a test of whether an AI-enabled attacker could breach BitGo’s wider controls, rather than whether Claude can derive private keys from public blockchain data. A controlled comparison would also require agreed rules, authorized access, activity logs and independent verification of any attempted attack.

As previously reported, BitGo has tested post-quantum MPC signing for institutional custody. In related coverage, crypto.news examined how Claude Mythos 5 could accelerate attacks against exposed keys, weak signing flows and misconfigured systems without creating a universal ability to defeat cryptography.

U.S. scrutiny now shifts toward testing controls

The dispute arrives as U.S. officials review how advanced AI systems should undergo cybersecurity testing. President Donald Trump directed advisers in June to develop a voluntary testing framework for leading models, according to Reuters. Anthropic’s disclosure may add pressure for clearer containment standards and incident reporting across AI laboratories and external evaluators.

Anthropic stopped its cyber evaluations on July 23, identified all three incidents the following day and notified affected organizations on July 27. It said METR would conduct an independent review and that it planned to release a redacted transcript of the malicious-package incident within one week. Irregular is conducting its own investigation.

Those disclosures, rather than movement from Belshe’s wallet, are the next formal checkpoints. Any transaction from the address would be visible onchain. However, investigators would still need to establish who authorized it, how the signing requirements were satisfied and whether a Claude model played any role.

Coldcard’s five-year seed-generation flaw has exposed a broader weakness in how hardware wallets are independently tested, according to Kraken chief security officer Nick Percoco. 

In an X post on Sunday, Percoco said the incident should be a “wake-up call” for hardware-wallet makers, calling for independent testing to verify that the approved source of randomness is the one actually used by production firmware. 

“Consumers are asked to trust a manufacturer’s implementation of the single most critical function in the system, with no independent verification that the approved entropy path is the one actually executing,” said Percoco. 

His comments follow an ongoing attack that is believed to exploit weak seed phrases generated by affected Coldcard devices. As of Sunday, over 4,500 addresses have been impacted, draining nearly $90 million in Bitcoin. 

Coldcard RNG flaw remained undetected for five years

On Thursday, Coinkite disclosed a software flaw that has existed since March 2021, when Coldcard changed its seed-generation process as it integrated a new cryptographic library. 

The migration inadvertently routed wallet creation to a weaker MicroPython generator that existed in the codebase, rather than Coldcard’s intended true random number generator (TRNG). 

“The bulk of randomness on the COLDCARD was coming from a PRNG that I didn’t know was actually in the source code base,” Coinkite said in its postmortem. “At the same time the carefully crafted TRNG code I wrote was being used, but just by chance, and only for less important things.”

The presence of the intended random number generator allowed the vulnerability to slip through undetected. Code reviews would confirm the existence and functioning of Coldcard’s TRNG code, but there was no check to ensure this was the RNG actually being called. 

Such checks are already standard across the rest of the security industry, said Percoco, referencing NIST SP 800-90B, a US government standard specifying requirements for designing, testing and validating physical true random number generators for cryptographic security and BSI AIS-31, a similar standard created by the German Federal Office for Information Security.

“Hardware wallets have no equivalent process. We have Common Criteria on secure elements, some CSPN certifications, and vendor-sponsored audits. None of them systematically force end-to-end verification that the validated entropy source is what production firmware actually calls,” he said. 

“The payments industry does not let PIN entry devices ship without independent lab testing. The US government does not accept cryptographic modules without entropy source validation. Digital asset self-custody should not be the exception,” said Percoco. 

Related: Suspected 4th Coldcard attack wave sweeps 389 Bitcoin: Galaxy’s Thorn

Coldcard said Sunday it has halted all device shipments since confirming the vulnerability on Thursday, and has destroyed all remaining units at its facilities containing the affected firmware. 

However, Coinkite has advised users with affected devices not to dispose of them as “it may become essential if funds are recovered.”

“Our legal team will coordinate as warranted with law enforcement across multiple jurisdictions to support efforts in identifying those responsible.” 

Related: Coldcard exploit sparks Bitcoin flight, ‘bullish’ crypto consolidation: Hodler’s Digest, August 2