Fidelity is preparing to add staking and quarterly cash payouts to its Fidelity Ethereum Fund (FETH), one of the largest spot ether ETFs in the U.S.

FETH, with $898 million in net assets, could stake as much as 100% of its ether under normal conditions, though Fidelity set no minimum, according to an amended registration statement. The fund would keep some ETH available for redemptions, expenses and other liquidity needs.

The shift follows an IRS safe harbor bulletin issued in November 2025 that lets qualifying crypto trusts stake assets without losing their grantor-trust tax status. Fidelity would join Grayscale and 21Shares in adding staking to existing ether funds. BlackRock took a different route by introducing a separate staking product.

Fidelity would retain 85% of gross staking rewards, while the remaining 15% would go to the fund sponsor, custodians and node operators. Blockdaemon, Figment and Galaxy are named as the trust’s node operators.

Net staking rewards would first cover fund expenses and would then be used for quarterly cash distributions. Funds must distribute net staking rewards at least quarterly, according to the IRS rules.

The fund may also sell some ETH to raise cash for payouts, Fidelity said.

Bitcoin treasury company Strategy has completed another Bitcoin sale, selling 1,690 BTC for $108.6 million, and using the proceeds to repurchase $109 million of its STRC preferred stock.

The company also sold $653 million in MSTR shares, using the proceeds to increase its dollar reserve by $650 million.

Strategy’s Latest Bitcoin Sale

The Michael Saylor-founded company disclosed the sale in an updated filing with the Securities and Exchange Commission (SEC). The sale is the latest by the Bitcoin treasury company to manage its dividend and interest obligations and leverage a portion of its holdings to fund a $5 billion reserve.

According to the filing, Strategy sold 1,690 BTC for $108.6 million, and repurchased $109 million worth of its STRC preferred stock. It also sold $653 million in MSTR common stock, using the proceeds to increase its dollar reserve.

Strategy swore by its Bitcoin purchases, spending billions to become the largest publicly traded holder of the flagship cryptocurrency, and spawning several other Bitcoin treasury companies. However, Strategy has pivoted away from its buy-and-hold approach in recent months due to macroeconomic and geopolitical headwinds. The company concluded a small sale of around 704 BTC in 2022. However, it switched to regular sales in late May and June, starting with a 32 BTC sale. It sold 3,588 BTC in late June and early July, and another 1,638 BTC at the beginning of August. The August 10 sale takes Strategy’s Bitcoin holdings down to 840,447 BTC.

Repurposing Its Bitcoin Holdings

Strategy has strategically sold BTC as its priorities pivot to meeting dividend, interest, investor, and capital obligations during a difficult phase for the broader market. The change in the company’s approach has been driven by a substantial decline in BTC’s value, forcing it to abandon its accumulation model to manage its balance sheet, including building a cash reserve and strategic sales to meet dividend obligations.

CEO Phong Le stated during a CNBC interview in May that Strategy could sell some of its Bitcoin holdings if it benefits shareholders.

“At the point where selling Bitcoin versus selling equity to pay a dividend is better for our bitcoin-per-share, we will do it.”

Saylor echoed similar thoughts, but stressed that Strategy would never be a “net-seller” of Bitcoin, a distinction made after intense criticism of the company’s selling.

“I’m very famous for saying ‘never sell your Bitcoin.’ That’s why the internet went crazy when we said we might sell it. But if I was being more precise: never be a net seller of Bitcoin. It just wouldn’t have been so viral.”

STRC Preferred Stock Declines

One of the primary drivers of Strategy’s recent selling is STRC’s declining share value. STRC, Strategy’s preferred stock, fell significantly below $100, hampering the company’s ability to issue new stock and fund Bitcoin acquisitions.

Strategy has attempted to get STRC back to $100 by introducing a new capital management framework that allows it to sell Bitcoin, build a cash reserve, and repurchase STRC.

Strategy has sold 6,948 BTC worth $432.5 million since May, using the proceeds to fund dividend and interest obligations. It introduced its Digital Assets Capital Framework in June, formalizing its strategy to sell a portion of its Bitcoin holdings. The framework allows the company to sell up to $1.25 billion in BTC to replenish its Dollar reserve, fund interest payments, dividends, and share buybacks.

Bitcoin Remains Primary Treasury Asset

Despite an uptick in selling, BTC remains Strategy’s primary reserve asset. The company currently holds 840,447 BTC, worth around $53.6 billion at current prices.

Le has insisted that Strategy will resume Bitcoin purchases over the course of the year, stating in a Fox interview,

“We’ll get back to buying more Bitcoin throughout the course of the year.”

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.

A group of cryptocurrency companies has urged frontier artificial intelligence (AI) labs to give Bitcoin developers early access to their most capable models.

The letter, published by the Bitcoin Policy Institute (BPI) on Monday, said many digital asset defenders, including Bitcoin Core developers, lack access to lab cyber programs and can be blocked by guardrails on publicly available frontier systems, leaving them to rely on less capable open-weight models.

The signatories urged frontier AI labs to “establish or expand standing trusted-access programs for qualified defenders of open-source financial infrastructure.” 

The letter said open-source software supports critical digital and financial infrastructure, while Bitcoin (BTC) alone secures more than $1 trillion in value. It added that a vulnerability in open-source infrastructure can place life savings at risk.

The open letter was co-signed by multiple crypto companies and organizations, including the African Bitcoin Institute, Anchorage Digital, BitGo, Bitwise, Blockstream, Bull Bitcoin, MARA, Kraken, Ledger and Trezor, among others.

Related: Strategy-led group pledges $15M to quantum-proof Bitcoin network

Open-source defenders need access to frontier AI

The letter said frontier AI is changing the economics of security research and cyber operations because advanced models can search large codebases, identify potential weaknesses and accelerate complex technical work for both defenders and adversaries.

It said frontier AI could become one of the “most powerful defensive technologies ever developed,” adding:

“Without dedicated access programs, defenders may lack the tools needed to keep pace with evolving threats to the infrastructure they maintain.” 

The BPI said it received multiple independent reports from open-source maintainers describing sophisticated actors, including potential foreign adversaries, using advanced AI capabilities to sustain attacks.

Total crypto hacks by monthly sum, all-time chart. Source: DefiLlama

Hacking activity across the industry surged in April 2026, as malicious actors stole over $634 million from cryptocurrency platforms, the highest monthly total since the Bybit hack, which helped drive losses to roughly $1.4 billion in February 2025, according to DefiLlama data.

Advances in AI-assisted vulnerability discovery have raised concerns across the crypto security industry. New models such as Claude Opus 4.8 and ChatGPT 5.5 have contributed to what Mitchell Amador, CEO of bug bounty platform Immunefi, described as a “vulnerability apocalypse” for the crypto industry.

Magazine: Bitcoin’s quantum upgrade path: What BIP-360 changes and what it does not

SharpLink, one of the largest corporate treasuries focused on Ether, reported a significantly wider loss for the second quarter of 2026 as ETH’s price decline weighed on its balance sheet. The Miami, Florida-based firm posted a net loss of $394 million, compared with a $103 million net loss in the same quarter of the prior year.

In the company’s Monday announcement, SharpLink attributed the bulk of the loss to $321 million in unrealized crypto losses and $76 million in impairments related to staked Ether tokens. At the same time, the firm generated $11.5 million in revenue, including $11.1 million from ETH staking.

Key takeaways

• SharpLink’s Q2 2026 net loss widened to $394 million, driven largely by $321 million in unrealized crypto losses.
• Impairments tied to staked Ether amounted to $76 million, adding pressure beyond mark-to-market declines.
• Revenue remained positive at $11.5 million, with staking contributing $11.1 million.
• Cash and cash equivalents rose to $56 million from $28 million as of December 2025.

Unrealized losses dominate SharpLink’s quarter

SharpLink’s financial results underscore how sensitive large Ether treasuries are to ETH’s spot price and to accounting treatment for staked derivatives. The firm reported that its Q2 2026 loss included $321 million in unrealized crypto losses, reflecting changes in the valuation of its Ether exposure rather than realized selling losses.

That valuation pressure aligned with broader market conditions. Ether fell by around 23% during the second quarter of 2026, according to CoinMarketCap. While staking produced income, the scale of the unrealized mark-downs appears to have overwhelmed that support.

Staking income and staked-token impairments

SharpLink generated $11.5 million in revenue in the quarter, including $11.1 million from ETH staking, according to the company’s Monday announcement. For Ether-focused treasury strategies, staking can partially offset volatility by adding cash-flow-like yield.

However, SharpLink also recorded $76 million in impairments on staked Ether (ETH) tokens. This detail matters for investors because it suggests that performance isn’t determined solely by ETH price moves; the accounting and valuation of staked-token instruments can introduce additional losses even when staking revenue is present.

How much Ether SharpLink controls

SharpLink said it holds 632,784 Ether, worth about $1.2 billion, plus an additional 181,321 ETH—worth roughly $343 million—through various liquid staked Ether tokens. Combined, this creates a substantial balance-sheet exposure to Ethereum’s price direction, with liquid staked products carrying their own valuation and impairment dynamics.

SharpLink is currently described as the second-largest Ether treasury company. Based on StrategicEthReserve data cited in the report, Bitmine is the largest corporate Ether holder, holding 5.54 million ETH worth about $9.4 billion. SharpLink’s current holdings are estimated at 863,000 ETH, valued at about $1.46 billion.

Buying ETH after an eight-month pause

SharpLink’s latest results arrive alongside a notable change in its acquisition pattern. Earlier coverage from Cointelegraph noted that the company resumed Ether purchases with a $7.8 million buy in late June after pausing for eight months. A second purchase followed days later, with SharpLink buying 10,000 Ether for about $16 million, as referenced by Cointelegraph.

That kind of buying at lower levels can be a strategic way to extend a treasury’s exposure when assets are discounted. Still, the Q2 financials show that even resumed accumulation doesn’t neutralize accounting losses in the near term when ETH declines sharply across the reporting period.

Treasury liquidity and equity-market reaction

SharpLink reported that its cash and cash equivalents totaled $56 million, up from $28 million in December 2025. Liquidity improvements can be important for corporate treasuries because they provide flexibility for operations and for potential future purchases—especially after a quarter marked by large unrealized and impairment charges.

On the equity side, SharpLink’s stock fell 3.9% on Monday, extending a 30% year-to-date decline, according to Yahoo Finance. For public Ether treasury companies, equity performance can reflect both the market’s view of treasury risk and expectations for how quickly staking yield and future purchases might offset volatility-driven drawdowns.

Going forward, investors should watch two things most closely: whether SharpLink’s staking revenue trend can stabilize amid continued ETH volatility, and how future quarters treat liquid staked token valuations and impairments—particularly if ETH’s price swings produce new mark-to-market pressure.

That amount is smaller than the ETF outflows. But in financial markets, price is set at the margin. The most recent buyers and sellers, not the cumulative volume over months, determine where the price goes. In a downtrend, when buying interest is already weak, even relatively modest and steady selling can have an outsized impact.

“Early year sales from public miners are an underdiscussed contributing factor [in] Bitcoin’s poor price performance in 2026,” the research and analysis division of Blockware Solutions said in its latest newsletter.

Many of these companies are facing squeezed margins, with the average cost to produce one bitcoin at $74,300. In response, a growing number are pivoting into AI and using their secured high-voltage electrical capacity to support that shift.

At the same time, mining difficulty, the computational work needed to add a new block, has fallen about 18% from its November peak, marking the longest stretch of declining hashrate.

In other words, the exodus and AI pivot of several large miners has eased competition, making BTC cheaper to mine and boosting rewards for those still in the game, a classic free-market reset that could lure new miners back in.

“In other words, the rest of the miners are earning ~18% more Bitcoin now than they were 10 months ago. The exodus of the largest players in the industry is improving the economics for the miners that remain,” Blockware said.

FlightAware, the aviation data company behind real-time flight tracking and status updates, has sued Kalshi in New York federal court over Kalshi’s use of FlightAware’s “data and name” to power prediction market contracts tied to flight cancellations. The complaint, filed in the US District Court for the Southern District of New York on Monday, accuses Kalshi of continuing to list event contracts using FlightAware’s registered trademark and purportedly “verified” flight-cancellation information despite repeated demands to stop.

The lawsuit adds a reputational and safety dimension to the broader legal battle already surrounding prediction markets in the US. FlightAware argues that wagering tied to flight disruptions could create incentives for manipulation and even interfere with air travel, while also positioning FlightAware as being involved in alleged “illicit” activity through unauthorized branding and data use.

Key takeaways

• FlightAware sued Kalshi in New York federal court, alleging continued use of FlightAware’s trademark and flight-cancellation data in prediction market contracts.
• The complaint frames flight events as safety-relevant, arguing wagers could incentivize participants to interfere with cancellations or pressure aviation workers to cut corners.
• Regulatory pressure on prediction markets is escalating, with states and federal regulators already contesting whether event contracts function as illegal gambling.
• FlightAware says customers may assume involvement due to the way Kalshi presents “verified by FlightAware” information and FlightAware branding.

Trademark and data-use claims put FlightAware at the center

According to the Monday filing in the Southern District of New York, FlightAware contends that Kalshi kept publishing event contracts related to flight cancellations even after FlightAware demanded Kalshi stop using its registered trademark. FlightAware also claims Kalshi continued to advertise those markets as being “verified by FlightAware’s data,” effectively tying FlightAware’s brand and information to the trading activity.

FlightAware’s lawsuit asserts multiple legal theories, including trademark infringement, breach of contract, harm to its reputation, and unfair competition. The company characterizes the expansion of Kalshi’s trading into commercial flight operations—reported as starting in July—as amplifying the reputational stakes of unauthorized association.

“[T]here was widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations, threatening public safety and creating the potential for massive disruption of air travel. Airlines condemned the markets,” said the lawsuit. “And due to Kalshi’s unauthorized use of FlightAware’s data and mark, customers immediately assumed that FlightAware was involved in the scheme.”

The complaint describes FlightAware’s requested remedy as preventing “harm to public safety” before any alleged damage grows—an argument that goes beyond branding disputes and into how flight-event markets might influence behavior.

Why flight-cancellation markets are central to the safety argument

While the lawsuit is anchored in trademark infringement and related business claims, it also makes a broader case that some prediction market structures can distort incentives—especially when participants may have information before it becomes public.

FlightAware’s filing points to concerns about manipulation in event contracts generally—particularly cases where traders might know more than the public until an event is formally disclosed. The filing references public reporting that has highlighted unusual betting activity in other contexts, including claims tied to political speech wording and allegations involving alleged nonpublic information.

On flight disruptions specifically, FlightAware argues Kalshi’s model risks creating incentives to affect outcomes that are operationally complex and safety-sensitive. In its complaint, FlightAware contends that:

“A market that allows the public to wager on whether flights will be delayed or cancelled creates an incentive for participants to interfere with air travel—including by causing or contributing to flight cancellations—to profit from their wagers.“

“Worse, wagers on flights being timely may incentivize airline, airport, or other aviation workers to cut corners to keep a flight on time.“

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The practical implication for investors and users of prediction markets is that the debate is not only about legality; it’s also about whether these markets create behavioral pressures that regulators and consumers should treat differently from, say, entertainment-focused or purely informational forecasts.

Prediction markets face a wider legal showdown in the US

FlightAware’s suit arrives amid intensifying legal scrutiny of prediction markets such as Kalshi and Polymarket. The company’s complaint is described as another step in a pattern of court challenges where gaming authorities have asked judges to halt or block event contracts for residents in their states.

Earlier coverage cited in the source notes that Michigan has sought to block Kalshi’s sports betting contracts. More broadly, the continuing legal conflict is expected to develop into a standoff between federal regulators and state officials over whether certain prediction markets amount to illegal gambling under state law, with attention often focused on sports-betting-adjacent products.

Within that landscape, FlightAware’s complaint is notable for targeting the infrastructure behind a specific market type: the data feeds and branding used to connect aviation status information to tradable events. Even if a court ultimately decides the “wager” question in a different frame, the trademark and reputational claims could still materially affect how prediction markets partner with, or reference, data providers.

Market dominance and scale add pressure

The source also points to a report from Predicted’s “State of Prediction Markets – Q2 2026,” which says Kalshi and Polymarket combined controlled more than 90% of all prediction market volume, and together had more than $90 billion in second-quarter notional volume. While this figure is not part of FlightAware’s lawsuit, it helps explain why disputes involving major platforms and data sources attract immediate attention: the potential impact of any court outcome is amplified by the scale at which these venues operate.

At the same time, scale can cut both ways. For data providers and industry stakeholders, widely used prediction products increase the cost of getting the compliance picture wrong—especially when branding and “verified” claims link a company’s name to markets that may be perceived as encouraging unsafe interference or manipulation.

Cointelegraph reported that it reached out to Kalshi for comment on the lawsuit but did not receive an immediate response.

Readers should watch how courts address both strands of this conflict—whether event contracts are treated as wagers under relevant laws, and whether unauthorized trademark and data-use claims can force changes to how prediction platforms source and present verified information. The next developments in the case could determine how far prediction markets can go in partnering with real-world data providers without triggering safety and compliance concerns.

ARP Digital, a Bahrain-based institutional digital asset infrastructure provider, has obtained a broker-dealer license from Dubai’s Virtual Assets Regulatory Authority (VARA). The approval enables the firm to provide regulated conversions between digital assets and the UAE dirham for eligible clients in the United Arab Emirates.

According to ARP Digital, the license is designed for UAE-based corporates, capital markets participants and qualified investors, including conversions involving stablecoins and dirhams. The company also positions the approval as a regulated route for institutions to convert digital asset capital for deployment into local UAE investments.

Key takeaways

• ARP Digital secured a VARA broker-dealer license, allowing regulated digital asset-to-dirham conversions in Dubai.
• Conversions can include stablecoins and UAE dirhams, targeting corporates, capital markets players and qualified investors.
• The license expands ARP Digital’s regulated footprint in the Gulf, following its authorization in Bahrain.
• Dubai’s VARA continues expanding its licensed market structure, with additional broker-dealer approvals reported alongside this move.

Broker-dealer approval for regulated UAE conversions

ARP Digital said the VARA broker-dealer license authorizes it to offer regulated “conversions between digital assets and the UAE dirham.” In practical terms, that matters for institutions seeking compliant on-ramps and off-ramps, particularly where stablecoins are used as a bridge asset between fiat and crypto exposure.

The firm’s stated scope includes both sides of the process: converting between stablecoins and dirhams, and providing a structured pathway for institutions to repurpose digital asset capital into investments tied to the local UAE market.

Bahrain license underpins the Gulf expansion

The VARA approval is described by ARP Digital as its second regulated Gulf market access point. In Bahrain, the company says it is licensed by the Central Bank of Bahrain and has handled more than $3.5 billion in processed volume for over 450 institutional and corporate counterparties.

ARP Digital also claims fourfold year-over-year growth in 2025 in its Bahrain operations. While the figures are company-provided, the broader implication for investors and institutions is clear: the firm is leveraging an existing regulated track record to extend similar infrastructure capabilities into Dubai’s expanding regulatory framework.

Institutional infrastructure beyond conversions

ARP Digital’s offering is not limited to fiat-crypto exchange services. The company lists institutional capabilities including:

• Over-the-counter (OTC) liquidity for large trades
• Cross-border settlement
• Fiat on- and off-ramps
• Wealth management

This matters because regulated conversion licenses can be a prerequisite for broader institutional workflows—particularly those that involve clearing requirements, risk controls, and compliance-oriented client onboarding. For market participants, the ability to access regulated routes for stablecoin and digital asset exposure can reduce operational friction compared with ad-hoc counterparties.

Dubai’s regulatory momentum and related broker-dealer approvals

The news arrives as Dubai continues to widen the perimeter of its regulated digital asset sector. VARA, established in 2022, regulates the provision, use and exchange of virtual assets in and from Dubai. Earlier coverage from Cointelegraph noted that VARA issued its 50th virtual asset service provider license in July.

Competition and market depth are also being shaped by new approvals. On Tuesday, Flowdesk—described as a crypto market maker backed by Coinbase Ventures and BlackRock—received a full VARA broker-dealer license. That authorization enables Flowdesk to serve qualified and institutional investors in and from Dubai.

Taken together, the sequence suggests VARA is not only expanding the number of licensed entities but also deepening the institutional services available under its framework—an important factor for liquidity, pricing efficiency, and the maturation of regulated crypto rails in the UAE.

What to watch next

With ARP Digital now licensed to conduct regulated stablecoin and digital asset conversions into UAE dirhams, institutions active in the region will likely focus on how quickly the firm ramps operational capacity, expands counterparties, and integrates its conversion services with broader OTC and settlement offerings. Observers should also track how VARA continues to scale licensing and enforce requirements as the Dubai market grows more crowded with specialized broker-dealers.