Ethena and FalconX have launched a $1 billion secured lending facility that will use assets backing USDe to finance overcollateralized loans for institutional borrowers.

How the $1 billion USDe facility will work

FalconX and Ethena said the warehouse financing arrangement will give FalconX capital to extend secured loans to institutional clients for trading, corporate treasury operations, and payment-related services.

Operating through a special purpose vehicle, FalconX will originate the loans, assess borrowers, service the credit, and manage the collateral. Qualified third-party custodians will hold the assets securing each position rather than leaving them under the borrower’s direct control.

Borrowers must pledge assets worth more than the amount they receive, creating a buffer that FalconX can use if the collateral loses value. Ethena will retain a first-priority security interest over assets held within the facility, according to the company’s announcement.

Collateral values, margin requirements, and liquidation procedures matter because falling crypto prices can quickly reduce the protection created by overcollateralization. While the structure can limit potential losses, it does not remove market, custody, operational, or counterparty risks.

FalconX will provide financing across several institutional activities, with both companies planning to increase deployments when borrowing demand supports additional loans. Neither party disclosed the interest rates, loan durations, eligible collateral, or minimum collateral ratios that will apply across the full facility.

Guy Young, founder of Ethena Labs, described institutional credit as a large and established source of returns that on-chain capital has rarely accessed.

“Partnering with FalconX gives us a secured, overcollateralized channel into institutional credit,” Young said.

FalconX Head of Credit Craig Birchall said the agreement would let the company provide secured financing for several institutional uses as digital asset lending becomes more connected with other capital-market services.

Ethena adds institutional credit to USDe backing

For Ethena, the facility introduces another source of returns for the portfolio supporting USDe, a synthetic dollar designed to track the value of the U.S. dollar.

USDe has historically relied on crypto collateral and hedged derivatives positions, including short futures positions intended to offset changes in the value of backing assets. Returns can come from funding payments, staking rewards, liquid stablecoins, tokenized assets, and lending arrangements.

Institutional loans had already become part of the reserve structure before the FalconX agreement. Ethena’s June governance report placed the segment at about $310 million, equal to 6.9% of USDe backing as of July 3, with an estimated annual yield of between 4% and 7%.

By comparison, DeFi lending accounted for roughly $2 billion, or 46%, across Aave, Morpho, Kamino, and Jupiter. Liquid stablecoins represented about 35% of the portfolio, while tokenized real-world assets made up 11.2%.

Crypto basis positions, once a central part of Ethena’s model, had fallen to around $39 million, or 1% of the backing portfolio. The same governance report recorded a backing ratio of 101.59%, a reserve fund of approximately $62 million, and nearly $1.2 billion in stablecoins available to process redemptions.

The figures show that Ethena was already reducing its reliance on derivatives-based returns before allocating additional capital to FalconX. Credit exposure carries a different set of risks because returns depend on borrower performance, collateral quality, enforceable legal claims, and a lender’s ability to liquidate pledged assets promptly.

Ethena’s institutional lending framework requires separate reviews for each counterparty. The protocol also includes off-chain credit positions in its proof-of-reserves reports and transparency dashboard, allowing users to see how much backing has been allocated outside DeFi markets.

FalconX joins Anchorage Digital, Maple Institutional, and Coinbase Asset Management among the counterparties approved under the program during March and April.

FalconX relationship expands beyond USDe trading

The lending facility builds on FalconX’s previous integration of the synthetic dollar. In September 2025, FalconX added USDe support across parts of its spot, derivatives, and custody operations.

Approved institutional clients gained access to over-the-counter liquidity and could hold USDe or use it as collateral for selected credit and derivatives transactions. The new arrangement reverses part of that relationship by allowing USDe backing assets to fund loans originated through FalconX.

Ethena has also connected USDe with other institutional platforms. As crypto.news reported in June, BlackRock integrated the synthetic dollar into Aladdin, an investment and risk management system used by institutions overseeing more than $20 trillion.

Ethena also selected BlackRock’s BUIDL tokenized money market fund as the main reserve asset for a white-label stablecoin product. BUIDL invests in cash, repurchase agreements, and U.S. Treasury securities, giving Ethena another reserve strategy outside its original crypto-based trades.

Public-market exposure to the Ethena ecosystem increased days before the Aladdin announcement when StablecoinX completed its merger with TLGY Acquisition Corp. The company began Nasdaq trading under the ticker USDE on June 26, with warrants listed under USDEW.

StablecoinX held about 3.03 billion ENA tokens valued at approximately $275 million using the 30-day average applied before the transaction closed. Its operating plan includes Ethena infrastructure, software services, and institutional distribution.

U.S. access depends on the contracting entity

For American institutions, the FalconX group operates through several affiliated entities with different registrations and permitted activities. FalconX Bravo Inc. appears on the Commodity Futures Trading Commission’s list of registered swap dealers and is a member of the National Futures Association.

FalconX Delta provides trading services to eligible U.S. institutional clients and is registered with the Financial Crimes Enforcement Network as a money services business, according to FalconX’s licensing disclosures. State money-transmitter requirements apply in jurisdictions listed by the company.

The Ethena facility, however, extends credit to a Cayman Islands segregated portfolio rather than FalconX Bravo or FalconX Delta. Its legal structure therefore depends on the contracting vehicle, the jurisdiction governing the arrangement, and the enforceability of Ethena’s first-priority claim.

For ENA holders and investors in Nasdaq-listed StablecoinX, the arrangement adds indirect exposure to Ethena’s institutional lending activity because revenue and ecosystem demand depend partly on the performance and adoption of USDe. The announcement does not state that retail customers or U.S. investors can borrow directly through the $1 billion facility.

A proud father

The Securities and Exchange Commission’s (SEC) new regulatory proposal marks a significant step forward from a set of “inapt” crypto rules to clearer and more enforceable digital asset regulations, according to Commissioner Hester M. Peirce.

A “whole generation has struggled with the SEC’s insistence” and the application of “a set of inapt rules to crypto,” but the SEC’s new crypto guidelines mark an important step toward “putting clear, sensible, enforceable rules in place for crypto offerings,” said Peirce in a statement released on Tuesday.

SEC Chairman Paul S. Atkins also praised the initiative and said that the agency’s prior enforcement-heavy approach has “driven investment offshore, limiting the type of protections that we can provide investors here,” according to a separate statement. 

In a Tuesday notice, the SEC proposed new rules to create a “clear and fit-for-purpose framework for certain investment contracts involving crypto assets,” allowing entities to raise capital while preserving investor protections. 

The proposal came days after the US Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act, which would provide a comprehensive framework for financial regulators overseeing the crypto industry. 

On July 27, Atkins told CNBC the agency was “ready, willing, and able to come out with rules“ on digital assets if the Senate failed to pass the CLARITY Act.   

Meanwhile, Galaxy Digital has cut its odds on the CLARITY Act’s chances of passing in 2026 to 10%, warning that multiple political issues remain unresolved and the Senate will have only about two to three weeks to pass it when it reconvenes on Sept. 14. 

Magazine: Why Meta is choosing partners over power in its 2026 stablecoin push

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Crypto-aligned political spending appears to have delivered tangible results in key US congressional primaries on Tuesday, with four of five candidates backed by ads from the Fairshake-affiliated PAC network winning or moving forward. The outcomes across Florida, Alaska, and Wyoming offer a snapshot of how aggressively the industry is trying to shape the next Congress ahead of the 2026 midterms.

According to reporting cited in the story, Protect Progress and Defend American Jobs together spent roughly $3.6 million on House and Senate-related campaigns in those three states—supporting candidates deemed favorable to the sector and, in one Florida case, backing a candidate who was also targeted by negative advertising financed by the same PAC.

Key takeaways

• Four of the five Fairshake-PAC-backed candidates won their primaries or advanced Tuesday.
• Protect Progress and Defend American Jobs spent about $3.6 million total on targeted ads across Alaska, Florida, and Wyoming.
• Florida’s 23rd district became a clear example of positive PAC spending: Protect Progress backed Lois Frankel with more than $150,000 in supportive media.
• Florida’s 24th district showed the sector’s presence in both directions: Oliver Gilbert won despite Protect Progress-negative ads exceeding $2 million.
• Lawmakers return in September as the Digital Asset Market Clarity (CLARITY) Act is set for Senate action.

PAC-backed primary results in Florida, Alaska and Wyoming

In Florida’s 23rd congressional district, Democrat Lois Frankel won her primary after Protect Progress funded supportive media costing more than $150,000. In Alaska’s at-large congressional race, Republican Nick Begich was expected to advance after Defend American Jobs spent a combined $1.5 million across multiple campaigns supporting sector-friendly candidates.

Elsewhere, Defend American Jobs-supported candidates also performed well in their primaries. Republican Sydney Gruters won in Florida’s 16th congressional district, while Representative Harriet Hageman won the Wyoming Republican primary for the US Senate.

With primaries completed, the article indicates all four winners are likely to face opponents in November’s 2026 midterms. In other words, Tuesday’s results may function less as an end point and more as a test run for PAC-backed strategy heading into the general election phase.

Protect Progress-backed ads amid accusations of “crypto con” messaging

Florida’s 24th congressional district carried an especially pointed twist. The Democrat Oliver Gilbert defeated challengers Shevrin Jones and Kendrick Meek, securing 34.4% of the vote, even though—according to the story’s cited reporting—he was the target of more than $2 million in negative ads funded by Protect Progress.

The article also notes that Oliver Gilbert reportedly accused “Trump’s tech billionaire buddies” of backing “crypto con artists” through the Protect Progress advertising. The Miami Herald report cited in the story described ads that included fake Miami Herald headlines that allegedly misrepresented Gilbert’s policy positions, while a Protect Progress spokesperson maintained that “the underlying facts in our ad are true.”

Gilbert did not mention the crypto industry or the ads in his Tuesday night acceptance speech, according to the piece. That absence matters in two ways: first, it suggests that the candidate may be trying to frame the victory in terms other than PAC-driven controversy; second, it underscores that voters may not be treating PAC messaging as a decisive factor—or at least not in a way that prevents a favored candidate from advancing.

The episode highlights a key tension in crypto political strategy. PACs can spend heavily to shape narratives, but negative campaigning can produce unpredictable outcomes—especially when opposition candidates still win primaries despite the attempted pressure.

How big the Fairshake-linked spending is—and why it matters now

The article places Tuesday’s results against the scale of Fairshake’s political activity. It says Fairshake reported a $193 million war chest as of January, and that the committee was responsible for funding more than $130 million in ads supporting candidates it viewed as pro-crypto and opposing those it believed were hostile to the industry in the 2024 election cycle. As of June, it states Fairshake had spent more than $82 million on races ahead of the 2026 midterms.

In this context, the primary results can be read as more than local election trivia. PAC spending affects who gets positioned as the “party’s” candidate going into November. Candidates who benefit from high-budget messaging may also gain confidence and visibility that matters for fundraising, turnout operations, and general-election persuasion—even when the spending is controversial.

The story further reports that a Fairshake spokesperson, Geoff Vetter, said the PAC is “just getting started,” framing Tuesday’s outcomes as part of building what the spokesperson described as a larger pro-crypto bloc in Congress.

Congress timing and the CLARITY Act’s upcoming Senate step

Beyond the election results, the article ties the political calendar to legislative momentum. Both the US House and Senate are on recess until September. It also states the Senate is scheduled to address a cloture motion related to the Digital Asset Market Clarity (CLARITY) Act, legislation expected to establish broader regulatory coverage for digital assets.

The piece notes that the bill passed the House in July 2025 with bipartisan support on a 294-134 vote. It also highlights that Senate Democrats have been pushing for stronger ethics provisions linked to the Trump family’s reported crypto investments, and that these concerns could affect whether the Senate proceeds quickly—or at all—with CLARITY during the current session.

Under that framing, 2026 election outcomes could shift the balance of power. If Congress changes hands after November, the article suggests lawmakers could either advance or block legislation affecting the industry—including CLARITY—especially if the measure does not move before the 2027 session.

That linkage is important for investors and builders because it connects campaign spending to the mechanics of policy. Regulatory clarity is often treated as a long-term theme in crypto, but the legislative process runs on committee schedules, floor votes, and party control. Primary elections that change who appears on the November ballot can ultimately alter which version of “clarity” becomes law.

With September looming and the Senate’s cloture motion for CLARITY on the horizon, readers should watch whether crypto-focused PAC victories translate into legislative momentum—or whether ethics-linked disputes keep CLARITY stalled. Just as importantly, the Florida 24th district result suggests that even heavy negative advertising funded by the sector is not guaranteed to derail candidates, leaving uncertainty about how far political spending can reliably control outcomes.

Nethermind has ended its LayerZero verifier role and moved its cross-chain operations to Chainlink after reviewing the two infrastructure providers.

Nethermind said Wednesday that it had migrated away from its decentralized verifier network operations and joined Chainlink as a node operator and strategic technology provider.

Nethermind has joined the @chainlink Network as a node operator and strategic technology provider, helping secure CCIP and Data Feeds as part of a joint mission to bring institutions onchain securely. https://t.co/SAqDnCGHQP

— Nethermind (@Nethermind) August 19, 2026

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The company will help operate Chainlink’s network while supplying engineering tools, infrastructure services, and integration support to blockchain developers. Nethermind said the decision followed an “extensive review,” but it did not publish the review or explain which technical and operational factors determined the result.

As part of the change, Nethermind will concentrate its cross-chain work on Chainlink’s Cross-Chain Interoperability Protocol. CEO Daniel Celeda described the move as a long-term infrastructure decision tied to the responsibilities carried by node operators.

“Being a node operator carries real responsibility for a network’s reliability, and that’s consistent with how we approach every engineering commitment we make.”

Neither company disclosed the financial terms of the arrangement. Nethermind also did not provide a deadline for completing the migration, saying only that it would issue updates as the process continued.

Nethermind’s Chainlink role replaces LayerZero verification

Within LayerZero, decentralized verifier networks independently check whether messages sent between blockchains are genuine and unchanged. Applications can choose which DVNs verify their messages and set the number of approvals needed before a transaction proceeds.

LayerZero’s documentation describes each DVN as a combination of smart contracts and off-chain systems. Once a message leaves its source blockchain, the selected verifiers confirm its digital fingerprint before the message can be committed and executed on another network.

Nethermind had served as one of the infrastructure operators available under that model. Its own website previously listed LayerZero DVNs among the cross-chain services run through its globally distributed infrastructure.

Under the Chainlink arrangement, Nethermind will instead operate a node within Chainlink’s network. Chainlink says its CCIP system uses independent node operators, transaction limits and a separate risk-management network to monitor cross-chain activity.

Reportedly, the move represented a decision by a major LayerZero infrastructure operator to use Chainlink’s “secure-by-default architecture.” Because the description came from Chainlink, it does not independently establish that one system eliminates the technical, governance, or operational risks found in cross-chain infrastructure.

Celeda said Nethermind has historically made “deliberate, long-term bets” on infrastructure that it believes will support on-chain financial services. Consolidating the firm’s cross-chain work around CCIP followed the same approach, he added.

LayerZero migrations followed the $292 million rsETH attack

Nethermind’s decision arrives four months after hackers drained 116,500 rsETH, worth about $290 million at the time, from Kelp DAO’s LayerZero-powered bridge.

The April 18 attack involved a forged cross-chain message and a single-verifier configuration. The attacker created unbacked rsETH and later placed much of it into Aave lending positions to borrow wrapped Ether, spreading losses beyond the bridge itself.

In May, Kelp DAO announced an rsETH migration to Chainlink while disputing LayerZero’s account of the security setup. Kelp said LayerZero had known about its 1-of-1 verifier arrangement and had previously treated the configuration as secure.

LayerZero CEO Bryan Pellegrino rejected Kelp’s claims. He said the protocol initially used a multi-verifier setup involving LayerZero Labs and Google before changing it to a single verifier, a configuration he said LayerZero had not recommended for production.

After the attack, LayerZero said it would stop approving messages for applications secured by only one verifier and would move affected projects toward configurations with multiple DVNs. LayerZero also attributed the incident to a compromised verifier rather than a flaw in its core messaging protocol.

Nethermind has not said whether the Kelp exploit triggered its review. Its announcement did not identify a security failure at LayerZero.

Other large projects have made comparable decisions since the attack. BitGo selected Chainlink in August as the exclusive cross-chain provider for Wrapped Bitcoin, replacing LayerZero across a WBTC ecosystem then valued at about $7.3 billion. As previously reported by crypto.news, the announcement brought the value covered by publicly disclosed LayerZero-to-Chainlink migrations to nearly $15 billion.

Aave adopted CCIP in July as the default system for cross-chain functions across its app and Stable Vaults. The protocol already used the service for GHO stablecoin transfers and governance messages before expanding the CCIP integration to deposits, withdrawals, vault rebalancing, and asset movements.

Wyoming adds a U.S. public-sector angle

For U.S. users, the closest public-sector comparison comes from Wyoming’s Frontier Stable Token, or FRNT. The Wyoming Stable Token Commission said on Aug. 18 that it had completed its migration from LayerZero to Chainlink following a state security review.

FRNT is issued by a U.S. public entity and is available on eight blockchains, including Ethereum, Solana, Base, Arbitrum, and Avalanche. Wyoming holds its reserves in cash and short-term U.S. Treasury securities, while reserve income supports the state’s School Foundation Program.

The commission named disclosure practices and operational security among its concerns about LayerZero. Executive Director Anthony Apollo said CCIP was the only system assessed by the state that met its security and reliability requirements “across the board.”

Under a multiyear agreement, Chainlink has become the exclusive cross-chain provider for FRNT, and the state has deprecated its LayerZero bridge. The Wyoming security review was not released publicly, leaving its full criteria and technical findings unavailable.

LayerZero said it respected Wyoming’s decision and was assisting with the transition. A company spokesperson said LayerZero had strengthened its security approach in recent months but did not address the state commission’s specific disclosure concerns.

Nethermind supports core Ethereum infrastructure

Founded in 2017, Nethermind develops one of Ethereum’s main execution clients, software used by network nodes to process transactions and maintain Ethereum’s state. The firm employs more than 200 people across client development, cryptography, blockchain security, formal verification, and institutional infrastructure.

According to Nethermind, its software supports more than 16,000 Ethereum validators and over $5 billion in delegated assets. Its infrastructure clients and partners include EtherFi, Gnosis, Lido, StarkWare, World, and Arbitrum.

Nethermind also contributes to Ethereum and Starknet development while providing smart-contract audits, research, and engineering services to financial institutions and crypto protocols. The company said its new Chainlink role will include technical support for developers integrating cross-chain services, alongside its responsibility for operating network infrastructure.