Tyler Williams, one of Treasury Secretary Scott Bessent’s senior digital asset advisers, left the U.S. Treasury Department on July 31 as Congress struggled to advance the CLARITY Act before its August recess.

Bessent confirmed the departure in a statement reported by Punchbowl News on Aug. 3. He called Williams “instrumental” in advancing the administration’s goal of making the United States the “crypto capital of the world.”

Punchbowl reported that Williams is “expected to return to the private sector,” although neither his next employer nor his future position was disclosed.

XRP holders can now borrow against their coins on Ethereum without selling them.

Flare, the blockchain that lets XRP be used in decentralized finance, told CoinDesk on Monday that its wrapped version of the token has been accepted as collateral by Sentora, which manages a $280 million lending pool of Ripple’s RLUSD stablecoin.

Borrowers post the wrapped XRP, called FXRP, and take out RLUSD against it.

The approval opens an isolated FXRP/RLUSD market on Morpho Blue where holders can borrow against XRP exposure rather than sell it. Access is permissionless with no whitelist required.

Sentora reviewed FXRP’s market behavior, oracle design, liquidity and liquidation capacity under its institutional risk framework before signing off, and the asset will face the same ongoing monitoring as other collateral in the vault.

Getting there takes several steps today. Users mint FXRP through Flare’s FAssets system, bridge it to Ethereum via Stargate, deposit it into the market and borrow at their chosen loan-to-value ratio. Flare says it is building a route through Smart Accounts that would let holders authorize the whole sequence from an XRP Ledger wallet, with direct XRPL-to-Ethereum minting also in development.

Crypto’s biggest players are still waiting to gain access to powerful new AI models to strengthen their code from attacks, but only a select few have been able to get it. 

US crypto exchange Coinbase said in June that it had secured access to Anthropic’s restricted Mythos model and Zcash’s Zooko Wilcox said Anthropic used the model to audit the Zcash protocol at the request of Shielded Labs, while other major crypto players are seemingly yet to get access.

“That’s one advanced frontier model that hasn’t been made available to crypto just yet,” Binance’s chief security officer Jimmy Su told Cointelegraph. “We have been trying to make inroads there. We also talked to other crypto exchanges and our own investors to try to make some progress. But we haven’t gotten the most frontier AI model, like Mythos.” 

The uneven access creates a new security divide in an industry where exploits can put billions of dollars at risk. While model developers like Anthropic and OpenAI have chosen to restrict their most cyber-capable models from the public, there are concerns that increasingly powerful open-source alternatives mean crypto firms are left to deal with sophisticated AI-assisted attacks without the most capable tools to defend against them. 

Crypto executives say restricted access is initially necessary

Anthropic says Mythos 5 uses the same underlying model as its publicly available Fable 5, but without safeguards that restrict sensitive cybersecurity work. 

OpenAI operates a similar tiered system: verified defenders can use GPT-5.5 with “Trusted Access for Cyber”, while its more permissive GPT-5.5-Cyber model is reserved for a smaller group conducting authorized penetration testing.

Crypto security executives interviewed by Cointelegraph said there is likely a need to initially restrict access to frontier cyber models, but said continuing to gate them becomes harder to justify once publicly available models approach the same capabilities. 

Source: Zooko Wilcox

Su said Anthropic’s controlled rollout is a responsible approach because newly released models may benefit attackers faster than defenders. 

“If it enhances the attacker much faster than the defender, then it actually is harming the ecosystem,” he said, adding that a limited testing period could reduce the potential “blast radius.”

Related: Can AI drain DeFi? Separating Claude Mythos hype from reality

However, Su said this calculation changes when competing models become more powerful and widely available. 

“As other more powerful models are being released, the pressure will be on Anthropic to make it more widely available,” he said. The question would be whether defenders can deploy the frontier model as effectively as attackers once it becomes available, he said. 

The number of critical-severity CVEs has climbed after the launch of Claude Mythos Preview. Source: Epoch AI

Solana Foundation chief information security officer Michael Coates, who joined the foundation in July, also supported safeguards but argued that legitimate defenders need a faster route to them. 

“I fully understand guardrails for advanced models, but we need to streamline the verification programs, the acceptance programs, to give these models to legitimate defenders,” he said.

“We need to make sure that the best models we can get are in the hands of defenders because attackers will have something capable enough.”

Blockchain Capital’s Sean Cheetham also supported eventually opening up restrictions, and said that broader availability could ultimately favor defenders as legitimate security researchers greatly outnumber the small groups conducting sophisticated attacks. 

“If good people can multiply their defense scale… you’re much better off just opening it up and allowing them to defend themselves,” he said.

Uneven access to frontier AI models 

Binance’s lack of access comes despite it being the biggest crypto exchange in the world by daily trading volume. The exchange holds a total of $137.8 billion in assets, according to DefiLlama. 

Crypto custodian Fireblocks, which secures trillions in assets annually, said in April it has sought access to Mythos and at the time, only used Anthropic’s publicly available model for pentesting, according to The Information, while Uniswap founder Hayden Adams in June slammed Fable 5’s safeguards that restrict prompts relating to cybersecurity. 

The Ethereum Foundation in July said it has been running “coordinated AI agents” to find bugs across its systems, but didn’t disclose which models were being used. 

Cointelegraph reached out to Ethereum Foundation, Fireblocks and Uniswap to confirm if they have since received access to frontier AI models. 

Source: Hayden Davis

Meanwhile, some crypto-adjacent companies have gained access. FIS, which provides technology to banks and partnered with Circle in July last year to let banking clients offer domestic and cross-border payments in USDC, joined Project Glasswing last month. 

Project Glasswing is Anthropic’s gated program for giving vetted cyber defenders and organizations responsible for critical software infrastructure early access to its restricted Mythos models.

HackerOne, which provides bug-bounty and security testing services to major crypto exchanges, among others, also said it joined Project Glasswing, though testing is confined to its own infrastructure, not its customers’ programs. 

Cointelegraph reached out to OpenAI and Anthropic about how many crypto companies have been given access to restricted models. 

AI-assisted hacking attempts on the rise

On Monday, Bitcoin swap service Boltz said it has chosen to halt its non-custodial bridge after seeing a steady rise in AI-assisted exploits over the past few months. 

“The pattern is clear: attackers now iterate faster than a team our size can find and patch.”  

Last week, Bitcoin hardware wallet company Coinkite said a number of its Coldcard devices were exploited due to a flaw in its wallet seed generation, which turned out to be less random than expected. 

It speculated that the attacker had used AI to review previous versions of the firmware to find and exploit the flaw, despite it using “one of the best available AI models” to review its code just weeks before. 

Magazine: Fears of AI-driven DeFi hack epidemic overstated for now — but not for long

Boltz suspended its Bitcoin swap services indefinitely on Aug. 3 after reporting months of automated, AI assisted probing and several contained exploits. 

The noncustodial swap provider said the attacks had accelerated sharply in recent days, leaving its development team unable to deploy fixes as quickly as attackers adapted their methods.

The team said it could not responsibly restore swaps while it remained under active attack and reviewed findings from recent security scans. Boltz described the suspected attackers as “multiple resourceful groups,” although it did not identify them or provide evidence independently confirming who conducted the attacks.

Boltz swap shutdown followed an earlier EVM warning

The wider shutdown followed an Aug. 1 notice concerning a bug in Boltz’s Ethereum Virtual Machine integration. The service initially disabled swaps involving assets such as USDT, USDC, WBTC, TBTC and RBTC while stating that Bitcoin, Lightning and Liquid swaps remained operational. Two days later, it stopped all swap services.

Boltz operates infrastructure connecting Bitcoin mainnet with the Lightning Network, Liquid and other supported networks. Its public API powers the main web application and outside integrations. Official documentation advises developers to use supported software development kits because they manage swap cryptography, recovery procedures and transaction states.

Moreover, Boltz said no customer funds were exposed during the incidents because users retain control of their assets throughout its atomic swap process. The company also said it absorbed the losses associated with the contained exploits because it operates as a fully bootstrapped business. Those statements remain company claims because Boltz has not published a technical incident report or independent security review.

The service’s API remains online for cooperative refunds. Users can also complete unilateral refunds without relying on Boltz infrastructure, according to the company. Its support team remains available for customers with unfinished transactions.

The distinction shows how noncustodial architecture can limit custody losses without preventing operational disruption. Users may retain their Bitcoin, but they cannot initiate new swaps through the affected service until operations resume or integrated wallets introduce alternative providers.

Wallets are seeking replacements for Boltz infrastructure

Bull Bitcoin said the shutdown temporarily disabled Lightning payments and conversions between Liquid Bitcoin and onchain Bitcoin within its wallet. Standard Bitcoin transfers, Liquid transfers, wallet restoration and storage functions continued operating normally.

The company said it was evaluating several replacement options and promised a separate mechanism for customers wishing to convert Liquid Bitcoin into onchain Bitcoin. It added that its Liquid Federation membership allows it to conduct conversions without depending on a third party.

ZEUS also disabled its own deployment of the open source Boltz stack, while Aqua notified users that the service suspension affected its swap functions. Neither wallet reported customer asset losses.

As crypto.news previously reported, Blockstream had integrated Boltz into its mobile wallet to support Lightning and Liquid swaps. The shutdown shows how applications that use shared swap infrastructure can face service interruptions even when their core wallet functions remain available.

Boltz has not provided a reopening date

Boltz warned users not to expect swap services to resume soon. It has not published a remediation timetable, detailed vulnerability list or conditions that must be met before operations restart. The team said it would provide another update after assessing its options.

The company’s attribution to AI assisted activity also remains difficult to verify without technical indicators. Automated scanning can increase the speed and volume of attacks, but Boltz has not explained how it determined artificial intelligence played a role.

In related coverage, crypto.news reported that Solana Foundation security chief Michael Coates expects artificial intelligence to strengthen both attackers and defensive systems. Boltz’s next update is expected to clarify whether it will introduce automated monitoring, outside audits or changes to its open source infrastructure before restoring swaps.

Initial support stands at 24.94 million SOL, or 5.8% of the 432.65 million staked, roughly 38% of the way to the 15% threshold a proposal must clear before it reaches an actual vote. That leaves 39.95 million SOL to find, or about $2.9 billion, before signaling closes on Aug. 18.

Sixteen validators have signaled so far, 2.3% of the set. Helius accounts for 16.03 million SOL of the running total on its own, close to two-thirds of everything gathered, with Blueshift next at 3.6 million and Temporal Emerald at 1.24 million before the list thins out.

As such, the burn increase is smaller than it sounds against what Solana issues. Even at the top of the projected range, 9,000 SOL a day sits against roughly 60,000 SOL of daily inflation, so the fee change alone does not turn SOL deflationary. That is part of why the two proposals travel together, with SIMD-0550 cutting issuance while SIMD-0553 raises what gets destroyed.

Meanwhile, Helius, which supplied 16.03 million SOL of the 24.94 million gathered, employs the engineer behind SIMD-0550.

But the 15% gate exists precisely to test this. Solana Foundation set it in July so the validator set would only vote on questions enough stake actually cares about, leaving routine technical work inside the SIMD process.

NEAR Protocol co-founder and NEAR Foundation CEO Illia Polosukhin proposed creating a protocol sovereign fund on Aug. 3, using roughly 30 million NEAR as its initial capital base. 

At the token’s price of about $1.8 at press time, the proposed treasury would be worth approximately $57 million.

The plan would direct current and future protocol revenue into a NEAR denominated fund. Part of the yield would pay for network security, validator support, multiparty computation providers and other public goods. Polosukhin described the forum post as a discussion proposal, not an approved mandate.

NEAR sovereign fund would begin with 30 million tokens

The proposed fund would combine the existing protocol treasury, revenue already earned and future revenue selected through governance. Rather than immediately spending or burning incoming assets, the treasury would hold NEAR and seek returns through strategies that governance would later define.

Polosukhin compared the structure with sovereign wealth funds in Norway and Singapore and with university endowments. Those models preserve a capital base while using part of its returns for recurring costs. Unlike those examples, the proposal says NEAR’s fund would hold the network’s native token and measure returns in NEAR.

In addition, the proposal forms part of NEAR’s broader tokenomics changes. The network cut its inflation rate from about 5% to roughly 2.5% in late 2025. It also activated an Intents fee switch in February 2026 that directs revenue toward NEAR purchases.

Polosukhin argued that burning revenue offers only a temporary reduction in supply. He instead wants revenue used to acquire NEAR, generate yield and create a continuing funding source. “If this proves to be successful,” he said, the network could gradually reduce inflation and potentially move toward a fixed token supply. That outcome remains conditional and has not been approved.

The fund’s returns could support the Validator Support Program, MPC providers and other services. House of Stake delegates could participate through existing delegation systems, while governance would set revenue scope, spending percentages and operating parameters.

Governance must still define investment risks

The proposal does not specify which yield strategies the fund would use. Early forum responses asked whether the treasury would rely on staking, lending, protocol owned liquidity, stablecoins or other assets. One commenter warned that NEAR’s decentralized finance markets may not absorb such a large treasury without compressing returns or increasing risk.

Those questions matter because staking rewards largely come from token issuance rather than external revenue. Lending, liquidity provision and leveraged strategies could add counterparty, smart contract, liquidation or market risks. The discussion called for exposure limits, independent oversight and transparent performance reporting against a NEAR denominated benchmark.

House of Stake is positioned as NEAR’s economic governance body. Its mandate covers treasury management, inflation, fees and incentive design. However, the sovereign fund post has not entered a confirmed vote or execution process.

Consultation lasts two weeks before any formal decision

Polosukhin invited validators, tokenholders and other stakeholders to comment for two weeks. After that period, supporters could develop detailed governance parameters and decide whether to advance a formal proposal. No launch date, target yield, asset allocation or final spending formula has been announced.

The proposal follows other attempts to connect network usage with demand for NEAR. As crypto.news reported, the protocol recently introduced staking based payments that convert locked tokens into monthly AI compute credits.

In related coverage, NEAR has also positioned its network and Intents system as settlement infrastructure for cross chain activity and autonomous AI agents. Those initiatives provide additional sources of fees or token utility, although their future revenue remains uncertain.

Proof of Attendance Protocol, commonly known as POAP, is winding down after more than five years, co-founder Isabel Gonzalez announced on Aug. 3. 

The decision closes the company behind one of Web3’s best-known digital attendance badge systems after millions of collectibles were issued for conferences, online events and community milestones.

Gonzalez blamed the closure on a business model that could not remain sustainable without weakening the project’s original purpose. She wrote that “crypto’s funding cycles and distribution dynamics made it hard to build a sustainable company without cannibalizing the ethos that made POAP mean something.” The statement did not provide a final service date, employee details or a complete migration plan.

POAP shutdown follows months in maintenance mode

The Proof of Attendance Protocol shutdown did not arrive without warning. The company placed its existing platform into maintenance mode on March 16. It stopped onboarding new issuers and ended active development, while allowing approved issuers, collector tools, APIs and existing integrations to continue operating.

At the time, the team said previously created POAPs would remain intact. It also warned that some operations could slow as fewer resources were assigned to the service. The August announcement now goes further by confirming that the company is winding down rather than simply pausing expansion.

Moreover, Proof of Attendance Protocol turned attendance at physical and online events into blockchain collectibles. Organizers typically distributed claim links or QR codes, allowing participants to mint a badge tied to a particular event. As crypto.news previously explained, Proof of Attendance Protocol badges use the ERC-721 NFT standard and moved from Ethereum to Gnosis Chain to reduce transaction costs.

Figures displayed by the project and cited in reporting show nearly 7.6 million collectibles created by more than 46,000 issuers. Gonzalez said organizations including Coinbase, American Express, Warner Music Group and Bayer had used the service, alongside many crypto communities.

Because the badges were minted on public blockchains, the company’s closure does not automatically erase them. Existing tokens should remain linked to their holders’ wallet addresses. However, continued access through POAP’s gallery, applications and metadata services may depend on how long the company maintains its supporting infrastructure.

POAP struggled to turn cultural reach into revenue

The protocol began at ETHDenver in 2019, when roughly 100 badges were issued to hackathon participants. POAP Inc. later developed the idea into a wider platform for preserving digital memories and raised $10 million in January 2022. Archetype and Sapphire Sport led the seed round.

Proof of Attendance Protocol later introduced charges for some commercial issuers after years of largely free distribution. The company hoped fees could support long term operations while keeping personal and community use accessible. Gonzalez’s latest statement indicates that those efforts did not produce a model the team considered sustainable.

The closure follows other Web3 products that built loyal communities but struggled to fund continued operations. In related coverage, crypto.news reported that Uncharted and Fishing Frenzy closed after failing to find a workable business model. Crypto.news also reported that Nike sold RTFKT after announcing the end of its Web3 services during a prolonged NFT downturn.

No final shutdown timetable has been published

As of Aug. 4, POAP’s main website, collector pages and developer documentation remained accessible. In the statements reviewed, neither Gonzalez nor the company announced a final cutoff date for those services. They also did not explain whether another organization would maintain the interfaces, APIs or metadata after the wind down.

Collectors therefore retain their onchain tokens, but the future of POAP’s hosted tools remains uncertain. The next verified update should clarify service deadlines, data preservation arrangements and whether the proposed open collectibles standard will continue under another structure.

Gonzalez said strong customer communities and lasting brand recognition remained among POAP’s most valuable achievements. Her assessment reflects the company’s view of its legacy, but it does not guarantee that POAP’s applications, infrastructure or brand will continue under new ownership.

Ripple said it has made two strategic investments aimed at expanding the infrastructure behind tokenized financial assets on its XRP Ledger (XRPL). In an announcement released Monday, the company disclosed funding into Zilo, a global transfer agency provider for wealth managers, and Licuido, a tokenization solutions firm regulated by the UK’s Financial Conduct Authority.

While Ripple did not provide deal sizes or investment terms, the move signals a continued effort to reduce friction in tokenized markets—particularly around how collateral can move and be reused across issuance and settlement.

Key takeaways

• Ripple announced strategic investments in Zilo and Licuido to support tokenized asset workflows on XRPL.
• The company expects the partnerships to improve regulated transfer agency, issuance, and collateral mobility on its ledger.
• Ripple’s stated focus is addressing “idle collateral” by enabling tokenized funds to be used as collateral from issuance.
• The announcements follow recent XRPL-related product and adoption milestones, including Aviva Investors’ tokenized fund launch and Ripple Mint for RLUSD.

Why Ripple is tying tokenization to regulated market plumbing

For institutional tokenization to scale, networks need more than smart-contract functionality—they require operational layers such as issuance controls, transfer agency services, and mechanisms that support compliance and collateral management. Ripple framed its investments as part of that broader stack.

According to the company’s announcement, Ripple expects the Zilo and Licuido investments to bring “regulated transfer agency, issuance, and collateral mobility” to XRPL infrastructure. That positioning matters because the capital markets bottlenecks that slow adoption are often less about token mechanics and more about how assets move through regulated processes.

Zilo and Licuido: transfer agency and FCA-regulated tokenization

Ripple said it invested in Zilo, which provides global transfer agency asset solutions for wealth managers. The UK-based company has reportedly raised $58.7 million in total equity funding, based on data compiled by Traxcn.

Ripple also announced an investment in Licuido, a tokenization solutions provider based in the UK and regulated by the Financial Conduct Authority. The combination of Zilo’s transfer agency orientation and Licuido’s regulated tokenization role suggests Ripple is targeting multiple stages of a tokenized asset’s lifecycle—from issuance through custody-related and operational handling.

Collateral mobility and the “idle collateral” problem

Ripple’s announcement tied the investments to a specific market issue: collateral that sits unused. The company said that by combining the investments, it aims to help address problems related to idle collateral by enabling tokenized funds to be used as collateral from the point of issuance.

In practical terms, this is the type of improvement that could reduce inefficiencies in leveraged trading, structured financing, or other institutional strategies where capital availability matters. If tokenized instruments can be deployed as collateral more directly, it may reduce the need to lock value in separate pools for different steps of the workflow.

However, the company did not provide implementation timelines or technical details in the announcement, leaving open questions about exactly how quickly these partnerships translate into new product capabilities on XRPL. Investors and ecosystem participants will likely want to watch for concrete rollout plans or integrations that demonstrate the promised shift from token issuance to usable collateral.

XRPL adoption momentum: RLUSD tooling and tokenized fund activity

Ripple’s investment news arrives shortly after other XRPL-related developments highlighted momentum in institutional tokenization.

One week prior to the announcement, London-based asset manager Aviva Investors launched a tokenized share class of its US Dollar Liquidity Fund on XRPL after receiving approval from the Central Bank of Ireland, according to earlier coverage from Cointelegraph. That example illustrates how regulatory clearance and asset-manager participation are becoming central to XRPL’s institutional narrative.

In addition, Ripple last month introduced Ripple Mint, a platform designed to give institutions new ways to access, mint, redeem, and manage its US dollar-pegged stablecoin, Ripple USD (RLUSD). By building tools around stablecoin operations and management, Ripple has been advancing the practical infrastructure institutions need for on-chain settlement and token issuance workflows.

Taken together, these efforts point to a broader strategy: pair ledger-level capabilities with real-world finance counterparts—asset managers, transfer agency providers, and regulated tokenization services—so that tokenized assets can be issued, moved, and operationally managed under compliance expectations.

Tokenized assets onchain: growth, concentration, and what to watch

The broader tokenized real-world assets (RWA) market has continued to expand, reinforcing why firms are investing in infrastructure. According to data compiled by RWA.xyz, XRPL is the 11th-largest blockchain network with $368 million in tokenized RWAs. Ethereum ranks first with $17.1 billion in tokenized RWAs.

RWA.xyz data also showed that total RWA holders increased by 50% to 1.57 million over the past 30 days, while the total value of tokenized assets rose by 1.5% to $37.3 billion. Those figures suggest that, despite concentration at the top, the sector is not standing still—participation and capital have both been trending upward.

For XRPL participants, the key takeaway is that growth in tokenization demand may increasingly depend on the maturity of the operational layer. Ripple’s stated goal—improving collateral mobility and transfer agency and issuance capabilities—directly targets a set of constraints that can limit institutional use even when tokenization technology exists.

Next, market observers will likely focus on whether Ripple can translate these investments into measurable product outcomes on XRPL—especially around regulated issuance workflows and the ability for tokenized funds to function as collateral from issuance, as Ripple described. Concrete integrations, pilot deployments, and partner announcements will be the clearest indicators of how quickly the strategy moves from concept to capability.

Kalshi CEO Tarek Mansour defended the prediction market operator on Aug. 3 after New York filed a lawsuit seeking at least $36 billion in damages, penalties and related relief. 

During a CNBC interview, Mansour compared Kalshi’s structure to Nasdaq and argued that the state’s allegations threaten the wider event contract business.

The legal case also moved away from New York state court. The prediction market platform removed the proceeding to the U.S. District Court for the Southern District of New York shortly after Attorney General Letitia James filed it on July 31. 

New York Supreme Court Justice Melissa A. Crane then treated the state’s preliminary injunction request as moot because the case was no longer before her court, according to court records shared by gaming law attorney Daniel Wallach. The decision was procedural and did not reject New York’s allegations.

Kalshi lawsuit moves into federal court

New York’s verified petition accuses the firm of repeatedly violating state gambling laws by offering event contracts without a New York State Gaming Commission license. The state wants a permanent injunction, an accounting of customer activity, restitution, disgorgement and civil penalties. It also seeks $100,000 for each alleged unauthorized sports wagering offer. Those requests remain allegations and have not resulted in a final judgment.

The company transferred the case to federal court about eight hours after the state filing, arguing that New York was attempting to regulate a derivatives exchange overseen by the Commodity Futures Trading Commission. As crypto.news reported, the state had initially asked for immediate restrictions while the wider case proceeded.

Justice Crane’s order temporarily removes that state court request from consideration. Wallach said New York could file the motion again if a federal judge sends the case back to state court. A remand decision would determine the forum, not whether Kalshi’s products are lawful.

Mansour says Kalshi resembles Nasdaq

Mansour rejected New York’s description of Kalshi as an unlicensed sportsbook. He said users trade with other participants while the prediction market platform matches positions and earns transaction fees. He added that officials could “copy and paste that lawsuit and file it against Nasdaq,” extending his defense beyond sports markets.

The comparison reflects Kalshi’s central argument that event contracts are financial instruments rather than conventional wagers. The firm is registered with the CFTC as a designated contract market, and its contracts generally allow customers to take opposing positions on whether an event will occur. New York argues that this structure does not change the products’ gambling character under state law.

Mansour also compared Kalshi’s regulatory battles with earlier disputes involving Uber and Airbnb. He portrayed the state action as resistance from established gaming businesses facing a new competitor. That remains Kalshi’s interpretation. New York has said its case concerns licensing, consumer safeguards, tax obligations and access by users below the state’s minimum sports betting age.

The CEO claimed New Yorkers had collectively earned more than $200 million on Kalshi during 2026. He also said the company proposed a system that could produce almost $10 billion in state tax revenue over five years. Mansour did not publish supporting calculations during the interview, so those figures should be treated as company claims rather than verified totals.

New York says event contracts are illegal gambling

The attorney general’s office alleges that the company allows customers to risk money on future events outside their control, meeting New York’s definition of gambling. The petition cites contracts covering professional sports, college games, elections and entertainment programs. It also alleges that Kalshi charges customers fees for entering those positions.

New York further claims that people aged 18 to 20 can use the platform even though state law sets the minimum age for mobile sports betting at 21. The state says licensed operators must follow local consumer protection requirements and contribute gaming taxes. The prediction market operator disputes the state’s authority to apply those rules to a federally registered exchange.

The petition refers to a reported $22 billion company valuation and annualized transaction volume of $178 billion. Those figures appear as the firm reported numbers in the state filing. They are not findings by the court, and the final monetary exposure cannot be known before an accounting and judgment.

Federal and state regulators remain divided

The new removal follows an earlier setback for the prediction market operator. On July 7, U.S. District Judge Analisa Torres refused to block the New York State Gaming Commission from applying state gambling laws to Kalshi’s sports contracts. She found that Kalshi had not shown at the preliminary stage that the Commodity Exchange Act displaced New York’s rules. Kalshi appealed, but its requests for emergency protection were also rejected.

The CFTC takes the opposite position. In an April federal complaint, the regulator argued that Congress gave it exclusive authority over swaps and other contracts traded on registered derivatives exchanges. New York maintains that states retain their traditional power to police gambling within their borders.

Courts have not applied one consistent approach nationwide. In related coverage, a Washington judge blocked Kalshi sports contracts after finding that state gambling laws could apply. A Minnesota federal judge reached a different early conclusion and temporarily blocked that state’s prediction market ban.

The federal judge assigned to New York’s newly removed case must now consider whether federal jurisdiction exists and whether the proceeding should remain in federal court. A remand would allow New York to renew its injunction request in state court. Keeping the case in federal court would move the immediate dispute into the same court system already handling related questions about CFTC authority and federal preemption.