Binance has denied that a system or pricing failure caused more than $5 million in alleged trader losses as the AKEUSDT perpetual contract surged from about $0.0076 to nearly $0.045 on Sept. 3.

Binance says AKE liquidations followed market volatility

X user xunlu alleged that more than 30 funding-rate arbitrage positions on Binance were liquidated within minutes at around 5:44 a.m. UTC+8 on Sept. 3.

The trader estimated the losses at more than 5 million USDT and alleged that the sudden move resulted from coordinated activity in the AKE market rather than ordinary trading.

Responding to the complaint, Binance Customer Support said AKE recorded large price swings across several exchanges and on-chain markets during the same period. The exchange attributed the liquidations to market conditions and rejected the claim that a technical problem on its platform caused the losses.

Binance also said an internal review found no fault in its pricing model, risk controls or liquidation engine. According to the exchange, its systems remained operational while the contract moved sharply, leaving leveraged positions exposed to an adverse price change.

The distinction matters because a liquidation can occur even when an exchange has not experienced an outage. Once the value of a trader’s collateral falls below the maintenance margin required for a position, the platform can close the trade automatically to prevent the account from building a larger deficit.

An August guide to margin calls published by crypto.news explained that automated crypto liquidations can move from a warning to forced closure within minutes. Unlike traditional markets, crypto derivatives trade around the clock, leaving traders with little time to add collateral during a fast price move.

AKEUSDT mark price relies on external spot markets

Binance does not offer AKE through its spot market, meaning the AKEUSDT perpetual contract cannot use an AKE price formed on Binance’s own spot order book. The exchange said it instead calculates the contract’s mark price from data gathered across several external spot venues.

A multi-market index is designed to reduce the effect of an abnormal print or short-lived price gap on a single exchange. Binance maintained that the index and mark-price process functioned as intended during the Sept. 3 volatility.

Perpetual futures do not represent ownership of the underlying token. Traders post collateral and take long or short exposure to a contract whose value tracks the asset, while recurring funding payments help keep the contract close to spot prices.

As a perpetual futures explainer noted in June, the mark price, rather than the last traded contract price, commonly determines when a leveraged position is liquidated. Exchanges generally calculate that mark from an index and a funding-related adjustment to limit liquidations caused by brief movements in the futures order book.

For AKEUSDT, the absence of a Binance spot pair makes the composition and behavior of the external index central to the disagreement. The trader has asked Binance to disclose the relevant trading records, liquidation data, and risk-control logs so the calculation can be examined.

Publicly available aggregated spot charts showed heavy volatility during the session. However, the highest combined spot reading was below the contract peak cited by the trader. The report said the gap could have resulted from price differences between the futures contract, external spot venues, or the index used to produce the mark price, but it did not establish which factor accounted for the difference.

Trader alleges AKE short squeeze hit arbitrage positions

The complainant described the affected trades as funding-rate arbitrage positions, a strategy that usually seeks to earn payments created by differences in perpetual-market positioning rather than profit from a token’s direction.

Funding-rate arbitrage commonly combines offsetting positions to reduce directional exposure. One version pairs a spot purchase with a short perpetual contract, allowing the trader to collect funding when short holders receive payments from longs. Other structures may spread positions across several exchanges or contracts.

Although such trades are often called market-neutral, they still carry execution, liquidity, collateral and exchange risks. A cash-and-carry guide published in August noted that an arbitrage position can face a margin call when its leveraged leg moves sharply, even if the combined trade is intended to limit exposure to price direction.

AKE’s reported rise from about $0.0076 to nearly $0.045 would amount to an increase of roughly 492%, or almost six times the starting price. A move of that size can rapidly reduce the margin supporting short futures positions, particularly when liquidity is thin and several trades share the same exposure.

The trader characterized the episode as a short squeeze, in which rising prices force short sellers to close their positions by buying back contracts. Such forced purchases can add to upward pressure and trigger further liquidations when nearby short positions breach their maintenance requirements.

During an unrelated market event in August, a $3 billion squeeze liquidated about $2.77 billion in short positions across major exchanges. Binance accounted for approximately $518 million of the total, while forced purchases pushed prices higher and activated more liquidations. The figures show how automated closures can accelerate an existing move, though they do not establish whether manipulation occurred in AKE.

Binance has attributed the Sept. 3 liquidations to the risks attached to leveraged trading and has not accepted the trader’s claim of coordinated market manipulation. No market regulator or independent investigator has publicly reached a finding on the allegation.

U.S. traders face a different perpetual futures market

For U.S. readers, the AKE dispute concerns an offshore Binance product that is not offered through Binance.US. American access to crypto derivatives remains subject to Commodity Futures Trading Commission rules, while offshore perpetual contracts have historically offered assets and leverage levels unavailable on regulated U.S. platforms.

Regulated perpetual futures began entering the U.S. market in 2026. The CFTC approved a Bitcoin perpetual contract from Kalshi in May, followed by contracts tied to other digital assets, while Coinbase secured another regulated path for domestic perpetual products.

U.S. platforms operate under different product approvals, leverage limits, and market-surveillance requirements. CME Group has challenged the CFTC’s treatment of perpetual futures, arguing that the products should fall under swap rules in the Dodd-Frank Act rather than be regulated as standard futures contracts.

In his complaint, the AKE trader also referred to an earlier TUT liquidation incident and said competing exchanges compensated some affected users. Binance has not agreed that the two events are comparable, maintaining that the AKE positions were closed because of market risk rather than an exchange pricing mistake.

Binance had acknowledged the complaint but had not announced compensation. The trader has requested the full transaction history, liquidation records, and risk-control logs related to the Sept. 3 session.

Prediction-market operator Kalshi is reportedly preparing to file with the US Commodity Futures Trading Commission (CFTC) for a new kind of energy derivative: a West Texas Intermediate (WTI) crude oil perpetual futures contract that would never expire. Bloomberg reports the filing could be made as soon as next week, while Reuters adds that the product would be available 24 hours a day, five days a week.

If regulators approve it, the contract would represent the first oil-linked perpetual futures offering to trade on a regulated US venue—an important test case for how the CFTC handles perpetual structures in markets traditionally built around fixed expiration dates.

Key takeaways

• Kalshi is reportedly seeking CFTC approval for a WTI crude oil perpetual futures contract with no expiration date.
• Bloomberg reports the CFTC filing could happen as soon as next week; Reuters says trading would run 24/5.
• The approval would mark the first oil-linked perpetual futures product to trade on a regulated US platform.
• The proposal arrives as the CFTC evaluates 24/7 trading expansion and whether perpetual contracts can be structured around physically delivered or storable energy commodities.
• Kalshi is also facing an ongoing jurisdictional fight over event contracts in state courts, creating additional regulatory friction beyond derivatives design.

A perpetual structure meets an oil market built on expiry dates

Perpetual futures—often called “perps”—differ from standard futures in that they do not have a set settlement or expiration date. In practice, this means traders can hold positions indefinitely without repeatedly rolling exposure into new contracts.

That structure is more familiar in some crypto derivatives markets, but it is still emerging in regulated commodity trading. Kalshi’s reported plan to attach the perpetual format to a benchmark like WTI is therefore notable not just for novelty, but for what it implies about regulatory comfort with perpetual mechanics in traditional commodities.

Bloomberg says Kalshi would file the contract with the CFTC, and Reuters reports it would trade 24 hours a day, five days a week. If approved, this could reshape how participants think about maintaining exposure to crude oil price risk—particularly for traders who prefer continuous participation instead of managing expiries and roll calendars.

CFTC groundwork: 24/7 trading and perpetual energy contracts

Kalshi’s oil perp push is happening against a backdrop of active CFTC consideration of market design. In June, the regulator sought public comments on extending standard futures contracts to 24/7 trading. The notice also touched on allowing perpetual contracts tied to physically delivered or storable energy commodities, including crude oil.

Later, in July, the CFTC halted the self-certified listing of a CME Group contract intended to bring 24/7 crude oil futures trading. The regulator said it was examining whether the product complied with federal commodities law, illustrating that expansions in trading hours and product structure face close scrutiny rather than automatic approval.

Now, with Kalshi reportedly pursuing a perpetual approach for WTI, the same core questions remain: how perpetual products fit within existing futures and commodities frameworks, and what guardrails are required for exchanges to operate these contracts legally.

Regulatory momentum doesn’t eliminate legal headwinds for Kalshi

While Kalshi’s derivatives ambitions focus on federal commodity regulation, the company also remains embroiled in separate legal disputes tied to its prediction-market business. Those disputes affect the operator’s broader business strategy and could influence how aggressively it expands into new asset classes or geographies.

On Tuesday, a Michigan state court issued a preliminary injunction barring Kalshi from offering sports-related event contracts in the state and requiring geofencing that blocks Michigan residents. Earlier this week, New Jersey asked the US Supreme Court to weigh in on a jurisdictional dispute after federal appeals courts reached conflicting decisions in cases involving New Jersey and Nevada. Reuters reported on the request, underscoring that the legal uncertainty is not confined to a single venue or state.

In other words, even if Kalshi secures regulatory traction in commodities derivatives, it is simultaneously managing uncertainty over whether federal commodities law preempts state gambling enforcement against event contracts traded on CFTC-regulated exchanges. That dual-track reality highlights how, for prediction-market operators, the compliance landscape can become broader than any single product filing.

Broader push for perpetual products: energy and beyond

Kalshi’s oil perpetual concept also reflects a wider industry interest in perpetual futures being brought “onshore” and aligned with US regulatory frameworks. In late August, Ondo Finance submitted comment letters to the SEC and CFTC urging regulators to bring perpetual futures tied to individual stocks onto regulated US venues.

Ondo argued that such products could potentially operate under the existing security futures framework without requiring entirely new rules. While Ondo’s proposal concerns stocks rather than crude oil, the underlying theme is consistent: market participants want perpetual-style trading to fit within established regulator-approved categories.

For investors and traders, this matters because product availability changes the mechanics of hedging, speculating, and managing liquidity. Perpetuals, if permitted and structured properly, can reduce the operational friction of rolling exposure, but they also raise regulatory expectations around risk controls, transparency, and the legal classification of these instruments.

For now, much hinges on what the CFTC decides to accept—and how it interprets the contract’s perpetual nature relative to commodities law. Readers should watch for whether Kalshi’s reported filing is submitted on schedule, how the agency responds, and whether any additional approvals or objections signal a broader shift toward perpetual derivatives for physical or storable commodities.

Dubai’s regulator VARA has signed a Memorandum of Understanding (MoU) with Securitize, a tokenization platform backed by BlackRock, aiming to deepen regulated tokenization capabilities across the United Arab Emirates. The agreement, announced on Thursday, sets out a collaborative framework rather than a single product rollout.

For investors and market participants, the practical value of the deal lies in what it’s trying to do: align institutional tokenization expertise with Dubai’s regulatory approach to help trusted tokenized markets emerge within a clear compliance environment.

Key takeaways

• VARA and Securitize signed an MoU to collaborate on regulated tokenization initiatives in Dubai.
• The framework is intended to combine VARA’s regulatory perspective with Securitize’s experience in institutional tokenization, without committing to a specific technology stack or launch.
• Dubai is also actively expanding its licensed ecosystem, including VARA’s recent milestone of issuing its 50th virtual asset service provider (VASP) license.
• Tokenized asset activity continues to grow across “real-world assets” (RWA), with RWA.xyz reporting rising holders and higher overall tokenized value in the past month.
• The MoU arrives as tokenization efforts are spreading into other regulated markets, including moves toward tokenized stock trading in the UK.

A regulator-to-institution framework for tokenization

Dubai’s Virtual Assets Regulatory Authority (VARA) and Securitize said their MoU is designed to support tokenization initiatives across Dubai and the broader UAE. In the announcement shared with Cointelegraph, the firms described the agreement as a collaborative structure intended to encourage institutional participation and strengthen the emirate’s digital asset ecosystem.

Crucially, VARA and Securitize framed the MoU as an arrangement that would help shape how tokenized financial products could operate under Dubai’s regulatory framework. That distinction matters because tokenization is still at an early stage in many jurisdictions: markets are moving quickly, but regulatory clarity often lags behind product innovation.

When asked about infrastructure goals, a VARA spokesperson told Cointelegraph that the MoU’s purpose is to establish a broad collaboration framework—aimed at identifying where each party’s strengths can support the development of “trusted, regulated tokenised markets” in Dubai. The spokesperson emphasized that the intent is to pair VARA’s regulatory perspective with Securitize’s institutional tokenization experience.

“The intention is to combine VARA’s regulatory perspective with Securitize’s experience in institutional tokenisation to identify where collaboration can help support the development of trusted, regulated tokenised markets in Dubai.”

At the same time, the spokesperson said there are no specific projects expected “at this stage.” That suggests the MoU is primarily about coordination and regulatory-integration work—potentially including planning, standards, and operational discussions—rather than immediate deployment of tokenized products.

Why Dubai’s licensing momentum is part of the story

Dubai has been trying to position itself as a hub for digital asset innovation, and VARA’s evolving licensing program is a key signal for the market. Earlier in July, VARA granted its 50th virtual asset service provider (VASP) license, this time to tokenization platform Tribe Tokenisation FZE.

That expansion provides context for the VARA–Securitize agreement. A growing number of licensed participants can make it easier for institutional projects to find compliant pathways, counterparties, and operational expectations. In other words, the MoU doesn’t just create a new relationship; it plugs into a broader regulatory-building effort already underway in Dubai.

Still, readers should note what remains uncertain: because no specific tokenized offerings were announced with the MoU, the market impact will depend on what collaboration outcomes follow—especially whether they translate into new product approvals, clearer operational guidance, or expanded institutional participation.

RWA demand continues to rise—measured in holders and value

The Dubai agreement is landing amid continued investor interest in tokenized assets, particularly real-world assets. According to data provider RWA.xyz, the number of RWA holders rose 103% over the prior 30 days to reach 3.2 million, while the total value of tokenized assets increased 2% to $38.5 billion in the same period.

Those figures help explain why institutional tokenization platforms and regulators are aligning now. Tokenization’s promise depends on liquidity, legal certainty, and scalable issuance and custody approaches—areas where regulation and institutional infrastructure can reinforce each other.

RWA.xyz also ranks tokenization platforms by assets under management (AUM). Securitize is listed as the largest tokenization platform with $4.9 billion in tokenized assets under management. Ondo Finance ranks second with $3.5 billion, according to the same data provider.

That competitive positioning is relevant: partnerships between regulators and the leading tokenization players may influence which standards become dominant—especially if regulators prefer structured, institution-ready approaches for tokenized financial products.

Tokenization is spreading beyond the UAE

Dubai’s push comes as tokenization efforts accelerate in other financial technology-focused jurisdictions. A few days before the VARA–Securitize announcement, Cointelegraph reported that the London Stock Exchange partnered with crypto exchange Kraken (via its parent) to launch tokenized stock trading on the operator’s night-time trading venue, with the goal of enabling 24/5 trading.

While the London initiative is focused on tokenized equities rather than RWA-focused tokenization, it reflects a broader trend: traditional market operators are experimenting with tokenized market structures to improve trading continuity and potentially widen access.

For participants, these developments collectively highlight a convergence: regulators and large financial institutions are increasingly treating tokenization as more than a technical experiment—something closer to mainstream market infrastructure.

What to watch next in Dubai

Because the MoU doesn’t include announced projects “at this stage,” the next sign of momentum will likely come from follow-on updates that clarify what the parties will collaborate on and how it maps to tokenized product launches under Dubai’s rules. Market participants should watch for any concrete initiatives that translate the agreement’s framework into regulated offerings—particularly as Dubai’s VASP licensing ecosystem continues to expand.

AI models Claude, Grok, ChatGPT, and Gemini all appear to be experiencing outages today.

Across the board, AI users are claiming that they can’t get the models, run by Anthropic, X, OpenAI, and Google respectively, to work.

Fifteen different services offered by OpenAI are reportedly experiencing issues, which OpenAI is currently trying to fix.

Claude’s status tracker detailed how its Mythos, Fable, and Opus models were affected, and it now claims that its Opus 4.8 and Opus 5 models are experiencing problems.

The rest, it says, “have recovered to baseline error rate.”

Read more: Search engines fix Claude leak but Perplexity users’ files still online

X confirmed that Grok was experiencing issues and that it’s investigating, while Cursor claimed, “All Grok models, automations, cloud agents, Grok bot and review agents” are experiencing “service degradation.”

Google’s status page claims that there haven’t been any issues with Gemini. However, the outage analytics site Down Detector claims it’s had hundreds of reports across the last few hours that indicate it’s not working for some.

None of the AI models have addresed the outage on X at the time of writing.

Got a tip? Send us an email securely via Protos Leaks. For more informed news and investigations, follow us on X, Bluesky, and Google News, or subscribe to our YouTube channel.

Polymarket has launched perpetual futures across 10 crypto, equity, index, and commodity markets, allowing eligible international users to trade with leverage of up to 20 times.

Polymarket Perps opens with 10 markets

Polymarket said in its launch announcement that the new service gives traders one interface for perpetual futures linked to cryptocurrencies, stocks, market indices, and commodities.

Uniswap founder Hayden Adams has argued that correlated tokenized-asset pools could move automated market makers into global finance after 10 stock-SPY pools processed $33 million in 12 days.

Uniswap founder Hayden Adams, in an Aug. 18 blog post, said tokenization could change which trading pairs attract liquidity and who supplies the capital behind them.

Ongoing discussions over court size

Student-loan infrastructure startup Pencil Finance says it has completed a fully onchain lending cycle worth $1 million, financing education borrowers in Southeast Asia and repaying investors via smart-contract-recorded cash flows.

In a Thursday announcement shared with Cointelegraph, Pencil described the milestone as its first “fully onchain” student loan cycle—one where the protocol deployed $1 million of lender capital on-chain and borrowers’ repayments flowed back to funders through a structured yield distribution.

Key takeaways

• Pencil Finance completed a $1 million student-loan cycle recorded on-chain, marking its first fully onchain deployment for this use case.
• The July 2025 bundle was funded by Animoca Brands, Open Campus, and New Campus, with senior fixed returns and a junior variable tranche tied to first-loss risk.
• The loans supported around 6,600 students across 118 schools and universities in Southeast Asia, with about 1,050 receiving direct funding.
• Pencil says the majority of borrowers were women (50%) and that 93% came from lower-income households—targeting students underserved by traditional lending.
• The announcement highlights growing interest in tokenized real-world assets (RWAs) for lending, including examples outside education.

How Pencil’s first onchain loan cycle worked

Pencil Finance said the protocol launched the $1 million loan cycle as an onchain bundle that functioned like a lender-to-borrower pipeline. Instead of keeping core loan accounting off-chain, the platform recorded the cycle on a blockchain network, where capital was deployed by lenders and later repaid by borrowers to distribute yield back to funders.

The project framed this as a proof point for transparency in credit: because the lending cycle is executed and tracked on-chain, investors and participants can follow the protocol’s operations through recorded transactions rather than relying entirely on traditional reporting channels.

What the tranche structure covered

According to the announcement, the $1 million bundle was funded in July 2025 by Animoca Brands, Open Campus, and New Campus. Pencil said the financing was organized into two tranches with different risk and return profiles.

The senior tranche offered fixed returns, while the junior tranche carried variable returns and bore first-loss risk. This type of waterfall structure is commonly used in tokenized and structured finance to allocate losses first to the riskiest portion of capital, potentially improving the risk profile of senior participants—while still exposing junior investors to performance variability.

Scale, eligibility, and who received support

Pencil Finance said the onchain student loan cycle financed approximately 6,600 students across 118 schools and universities in Southeast Asia. The company noted that around 1,050 of those students received direct funding under the cycle.

As for borrower demographics, Pencil reported that 50% of funded students were female and that 93% came from lower-income households. The company positioned these figures as evidence that the program is reaching applicants who are often overlooked by conventional lending, where credit access can be constrained by documentation requirements, limited credit history, or geographic and income barriers.

Notably, Pencil claimed the project is the first-ever “fully onchain” lending cycle financing student loans with transparent recording on a blockchain network—an emphasis that matters because tokenized RWA lending is still frequently debated on how transparent and auditable it truly is compared with established financial processes.

Why tokenized loans are gaining attention

Tokenized RWAs are increasingly being used to issue or collateralize loans, and Pencil’s announcement fits into a broader trend of trying to bring more of the lending lifecycle on-chain. The education-focused milestone also echoes how other markets are experimenting with onchain representations of real-world exposures.

For example, earlier coverage from Cointelegraph noted that in July, Brazil’s B3 stock exchange issued a 100,000 Brazilian reais (about $19,600) loan secured by 10 tokenized cows. In that structure, each cow was linked to a unique digital token tied to an encrypted digital identity, while AI-powered smart collars from agriculture tech company Cowmed monitored animal health.

While student loans and farm-asset-backed credit are fundamentally different, both examples point to the same underlying goal: encode key parts of credit risk and reporting into tokenized systems to improve traceability and potentially reduce the friction between traditional assets and onchain capital.

What to watch next

With Pencil Finance now pointing to a completed first fully onchain student loan cycle, the next questions for readers and potential participants are whether subsequent cycles sustain repayment performance at scale and how tranche design evolves as more borrowers—especially underserved groups—enter the system.