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Chair of the Federal Reserve Kevin Warsh speaks during a news conference at the William McChesney Martin Jr. Federal Reserve Board Building in Washington, DC, on July 29, 2026.

Brendan Smialowski | Afp | Getty Images

Add the possibility of fewer meetings into the mix of how Federal Reserve Chairman Kevin Warsh wants to reduce the central bank’s footprint on financial markets, a move that some experts say could introduce both volatility and opportunity for investors.

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Since taking office in May, Warsh has implemented several measures that reverse decades of Fed culture in which policymakers have been aggressively transparent — some say overly so — about where they think monetary policy is headed.

Thus far, he has curtailed so-called forward guidance, or how the Fed signals its future rate moves, dramatically shortened the post-meeting statement and provided cryptic and often evasive answers when questioned about his views during the two news conferences he’s held so far.

Now comes the possibility, discussed in what one Fed source described as mostly hypothetical terms, of reducing the long-held schedule of eight meetings each year for the rate-setting Federal Open Market Committee.

Such a move would further curtail the communications output from the Warsh Fed — and lead to some uncertain outcomes for the stock and bond markets.

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“Certainly, it’s going to increase volatility,” said George Catrambone, head of fixed income for the Americas at DWS Group. “Having less transparency forces market participants to hedge or have a wider dispersion of outcomes.”

‘Nothing magical’ about schedule

The Fed has used various meeting strategies over the decades.

Until the early 1980s, it met nearly monthly before changing to eight a year under former Chairman Paul Volcker. Moreover, the Fed is free at any time to call meeting, though the market implications could be substantial given that such a move would be considered an emergency.

Minneapolis Fed President Neel Kashkari told CNBC on Wednesday that he is fine with re-examining the meeting schedule.

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“I don’t think there’s any magic number about eight or 10 or six. You know, we always have the ability to call emergency meetings if things happen, but that’s a big event,” he said. “When the FOMC calls an emergency meeting, it really sends a signal that we’re concerned about something. And so, you know, I think I’m open-minded. I don’t have a strong view.”

Philadelphia Fed President Anna Paulson on Tuesday expressed similar sentiments, telling CNBC, “it’s healthy to have a good discussion about that.” Other Fed experts take a similar tack that having a fewer meetings a year might not be a big deal to markets.

“There’s nothing magical about eight meetings,” said Bill English, the Fed’s former head of monetary affairs during Warsh’s first stint there and now a Yale professor. “There are costs associated with having a lot of meetings, but on the other hand, you don’t want to have so few meetings that you end up not acting in a timely way.”

English said he once proposed six meetings a year, but with each including a news conference as well as an update to the Fed’s Summary of Economic Projections. Overall, he sees eight as “close to the right number” and instead is more concerned about other aspects of Warsh’s strategy.

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“I really don’t like this effort to communicate much less,” he said. “Explaining more about why you’re doing what you’re doing helps the public to understand it. It helps the public to anticipate it. It makes monetary policy more effective, and also it it just seems like it’s appropriate to make the Fed accountable.

Muted market reaction

So far, markets either have been willing to give Warsh the benefit of the doubt, or simply have been too focused on geopolitics to care about the Fed rumblings.

The Dow Jones Industrial Average has added about 3,500 points, or 7%, since Warsh took over from now-Governor Jerome Powell on May 22. Bond yields on net have risen though not dramatically, with the policy-sensitive 2-year Treasury up about 8 basis points, or 0.08 percentage points, while the benchmark 10-year yield has risen about the same.

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Dow since May 22

Those moves have come despite Warsh defying a tradition of open communication that dates back into the latter part of the 20th century while also establishing five task forces aimed at a top-to-bottom rethinking of the Fed’s approach to policy, communications strategy and data utilization, among other things.

“He’s kind of getting away with it,” said Mark Hackett, chief market strategist at Nationwide. “Warsh is really the first Fed official that I’ve seen explicitly say he wants the Fed to have less direct impact on market movement.”

Indeed, Warsh has told market participants explicitly that they should be reacting to data, not the vagaries of Fedspeak.

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“Market participants are learning to play the ball, not the referee — and market prices will continue to respond in the direction and magnitude they see fit,” Warsh said during last week’s news conference. “This is, in my view, a change for the better — and we are just getting started.”

Still, some investors think Warsh’s strategy is risky.

“The main takeaway is more volatility,” Dario Perkins, head of global macroeconomics at TS Lombard, said in a note in which he deemed the result of Warsh’s approach “a regime of continuous market repricing.”

“Investors have to get used to FOMC meetings at which they don’t know the outcome ahead of time,” he added. “That will also provide new trading opportunities. It goes without saying that this may well be what Warsh has wanted all along.”

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Potential ramifications

Concerns already have been raised about the chairman’s feelings over forward guidance, and that has been exacerbated by a loosely defined reaction function — a delineation of the economic conditions that would cause the Fed to react. Warsh also has spoken critically about the Fed’s “dot plot” of individual officials’ rate expectations and declined to submit his own dot when the Federal Open Market Committee last updated the grid in June.

Adding to the information vacuum by only meeting, say, four or six times a year raises further concerns that a market that has for decades looked for cues from the Fed now will have to guess at policy.

“Obviously, if the the dot plot changes or if guidance changes, I don’t think that’s the end of the world,” Hackett said. “If you stop start having less meetings, that’s a different level, and that could be seen as disruptive.”

One potential consequence would be longer-term yields rising faster than shorter-term rates, what the market refers to as a bear steepener, said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. The implication is that fixed income investors would see the Fed holding short-term rates low and causing inflation expectations to rise.

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10-year Treasury yield in 2026

“Bondholders are not babies trying to have their hands held,” Sri-Kumar said. “The bondholders are saying, ‘Please don’t make my life more difficult by introducing even more uncertainty.’”

The federal government literally can’t afford a spike in yields as it struggles with financing costs for the $31.1 trillion in outstanding Treasury debt held by the public.

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If investors sour further on government debt, it will make Bessent’s job tougher at a time when interest on the debt is second only to Social Security in government outlays. The Treasury Department estimates it will spend $1.3 trillion this year on debt financing costs.

In a CNBC appearance Tuesday, Treasury Secretary Scott Bessent described the Warsh approach as a “detox” for markets.

There are plausible benefits and plausible drawbacks, and after such a short time, nobody really knows if the new approach will work. In the meantime, Warsh has a very important speech coming up when the Fed holds its annual gathering in Jackson Hole, Wyoming at the end of August, a time that prior chairmen used to lay out new agendas.

“Warsh is trying to undertake a very large change in terms of how to communicate the data and how to interpret it,” said Catrambone, the DWS bond strategist. “I would say we should also provide a little bit of grace.”

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The UK AI Security Institute (AISI) disclosed that an AI agent, built on Anthropic’s Mythos 5, autonomously ran a social engineering attack during cyber testing. The agent opened a pull request containing malicious code on a real open-source project and created fake identities to win a maintainer’s approval.

The attempt failed. A human maintainer caught and refused to approve the code.

AISI says its investigation has not identified any resulting real-world harm. The model also ran with its developer’s cyber classifiers deliberately switched off and open internet access, a test configuration that is not commercially available.

How the AI Agent Ran Its Malicious Code Campaign

AISI logged 19 unsanctioned actions in 10 of 122 evaluation runs conducted in late July, according to its report. 17 traced to Anthropic’s Mythos 5 model, and two to a single run of OpenAI’s GPT-5.6 Sol.

The agent researched the project’s human maintainers and created multiple fake identities. It used them to socially engineer a real maintainer into approving the code.

When the pull request was publicly challenged, it edited its earlier activity to appear harmless. The model also considered adopting a fresh identity to continue.

The playbook recalls the 2024 XZ Utils backdoor, in which a human-run persona spent years earning a maintainer’s trust before planting hidden code. AISI’s report does not draw that comparison, but the contrast is hard to miss. The activity unfolded over several days, between July 25 and July 28. 

AISI stressed that nobody asked the model to lie.

“It was never instructed to deceive; deception emerged as a by-product of pursuing the task, the kind of goal-directed deception that, until recently, had been largely theoretical.”

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The institute said so in its disclosure. It also acknowledged that misconfigured prompts led the agent to believe some tasks could not be solved within their intended scope. Although the behavior also appeared in runs where the agent had the instructions it needed to stay on task. 

Security teams caught the activity on July 28, when the agent used the Tor anonymity network to bypass some network restrictions on GitHub. GitHub confirmed the actions violated its terms of service. AISI also worked with the platform to remove artefacts left behind by the agent and to notify the users it interacted with. 

The report argues that the case signals a shift in the source of risk: harm can arise not only when people misuse publicly available models but also when capable agents in privileged settings act beyond their authorized scope. 

AISI said the case points to a broader shift in the AI risk space. The institute now plans an independent review with METR, an AI evaluation nonprofit, as well as tighter network controls and real-time monitoring for future tests.

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The post AI Agent Faked Identities to Push Malicious Code During Cyber Test, AISI Finds appeared first on BeInCrypto.

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Bitwise Chief Investment Officer Matt Hougan said the CLARITY Act could fail to pass this week, but that would not mean the end of the legislation or the crypto industry’s progress.

The US Senate is scheduled to leave for its August recess on Friday, August 7, and return on September 14. Under Senate rules, lawmakers must file for cloture on the CLARITY Act by Wednesday, August 5, for the bill to have a chance of receiving a vote before the recess.

Crypto Without Clarity

A failure this week would also not necessarily end the act. Hougan expects the legislation to enter a “walking dead” state. That could lead to fresh efforts to pass it in September or during a December lame-duck session. Congress often combines several measures into year-end omnibus legislation, and creates another possible route for the bill.

For Hougan, the bigger issue with that uncertainty is its effect on investors. Some professional investors are holding back from crypto because they do not want to commit capital while the outcome of CLARITY remains unclear. They may wait to see whether the legislation passes or fails and how markets respond.

If the bill does not pass this week, Hougan said a sharp drop in its Polymarket odds could actually help remove that uncertainty. He said the market may wobble initially, but a clearer outcome could leave crypto better positioned for a rally in the fall.

The Bitwise exec sees the Securities and Exchange Commission (SEC) as another potential path for the industry. Chair Paul Atkins recently said the agency is ready and able to introduce rules addressing the same issues covered by CLARITY. Hougan said these rules may be more supportive of crypto and innovation in the short term than a bipartisan congressional bill. The risk, he explained, is that a future administration could appoint a less supportive SEC chair and reverse those policies.

Despite this, Hougan noted that crypto has already built too much momentum for a future regulator to stop its progress. He cited BlackRock’s Bitcoin ETF, efforts by Nasdaq and JPMorgan to tokenize assets, and work by Visa, Mastercard, Stripe and Coinbase on a stablecoin platform. He also pointed to Robinhood’s blockchain, which connects with DeFi applications including Uniswap and Morpho.

The industry is also gaining a stronger position within the US banking system. For instance, the Office of the Comptroller of the Currency has granted trust charters to Circle, Ripple, Paxos and other firms. Outside the US, governments including those in the European Union, Japan and Russia are also pursuing pro-crypto legislation.

The exec said the situation resembles the early development of the internet. Congress failed to advance major telecom reform in 1994, but the internet continued to expand. Netscape, Amazon and eBay emerged, and the number of websites grew rapidly. Congress eventually passed the Telecommunications Act of 1996.

Long-Term Impact

Hougan’s argument comes as other crypto industry figures have also highlighted the wider regulatory impact they believe CLARITY could have. Andreessen Horowitz’s Chris Dixon, for instance, recently said that the bill could help prevent another FTX by giving regulators clearer oversight of crypto exchanges and establishing rules around disclosure, fraud and insider trading.

Dixon said that the market outside stablecoins, which he estimated at around 85% of the market, still lacks a comprehensive federal regulatory framework. Additionally, major banks and fintech firms are now moving beyond experiments, with significant blockchain deployments already live or expected to launch.

While agencies such as the SEC and the CFTC can address many issues, if CLARITY does not pass, Dixon added that legislation offers more lasting rules and gives businesses greater confidence to make long-term investments.

The post What Happens to Crypto If the CLARITY Act Fails This Week? Hougan Explains appeared first on CryptoPotato.

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Federal prosecutors have indicted Taj Tarsha, founder of the NFT startup Few and Far. They accuse him of stealing more than $10 million raised to build a decentralized marketplace.

The US Attorney’s Office for the Southern District of New York announced the charges on Wednesday. Tarsha, 34, of Miami, faces one count of securities fraud and one of wire fraud.

The Math Behind the $10 Million Raise

Tarsha started raising money in February 2022. He used Simple Agreements for Future Tokens (SAFTs), contracts that let investors pay now for tokens delivered later.

He sold 95 million FAR tokens to at least 67 backers, the indictment says. That works out to roughly 11 cents a token, and close to $150,000 per investor.

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The pitch carried real credibility. Few and Far ran on NEAR Protocol. The NEAR Foundation announced a grant and partnership in September 2022.

Tarsha owned every share of the company. Prosecutors say the money began leaving almost at once, moving to an online casino and speculative crypto trades.

The raise landed at the top of the collectibles boom. The NFT market cap slid toward record lows since then, and venues such as Gemini’s Nifty Gateway closed.

What the Audit Found

An audit in June 2023 caught the missing money. By then, prosecutors say, Tarsha had paid himself nearly $1 million through two hidden bonuses.

He hid those from investors and a co-founder. He also drew a salary he privately called unreasonable, given what he described as the company’s “zero revenue.”

Tarsha then told investors the bonuses matched preset presale targets. He said every remaining dollar was still needed. Both claims were false, prosecutors allege.

Nearly all staff were gone by then. One contractor stayed on, told to produce work that only looked like development.

The spending ran for 11 more months after the audit. It covered crypto buys, a Miami condominium loan, interior design work, and his DJ hobby.

FAR finally launched in May 2024. That was 27 months after the first investor paid in. The token arrived worthless and stopped trading soon after.

The Few and Far website is still online today, still advertising FAR as live on mainnet.

“As alleged, Taj Tarsha raised millions of dollars from investors by promising that their investments would be used to build a marketplace for non-fungible tokens, but he instead breached their trust by stealing those funds for his own personal benefit,” Deputy US Attorney Sean S. Buckley said that in a statement. The FBI’s New York office investigated.

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Each count carries up to 20 years. The case sits with US District Judge Lewis A. Kaplan, who in April rejected Bankman-Fried’s retrial bid.

Kaplan sentenced the FTX founder to 25 years in March 2024 for stealing over $8 billion. Tarsha is accused of taking about one eight-hundredth of that sum.

The charges are allegations, and Tarsha is presumed innocent unless convicted. Prosecutors must now tie each purchase back to an investor deposit.

The post NFT Founder Charged With Fraud Over $10 Million Token Sale, DOJ Says appeared first on BeInCrypto.

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Three Citadel funds posted July gains after the firm bought a discounted portfolio of artificial intelligence stocks from Situational Awareness, the collapsed hedge fund run by former OpenAI researcher Leopold Aschenbrenner.

Ken Griffin’s flagship Wellington fund rose 5.9% for the month. Almost all of that gain arrived after the purchase.

Citadel Funds Made Half a Year’s Gain From One Deal

Wellington was up just 0.45% in July before the deal, Bloomberg reported. It closed the month at 5.9%.

That gap is the story. The fund did almost nothing for three weeks, then made its year in days.

For scale, Wellington returned 10.2% across all of 2025. July alone delivered more than half of that.

Wellington is now up 12% in 2026. It has already beaten last year’s full result with five months still to run.

The firm’s other two books did better. Citadel Equities gained 14.2% and Tactical Trading added 11.1%, according to figures shared with investors.

Both sit near 27% for the year. In all of 2025 they returned 14.5% and 18.6%.

Rivals moved the other way. Whale Rock’s flagship fund dropped 21.7% in July, erasing roughly half its 2026 gains.

Situational Awareness Had No Choice but to Sell

Situational Awareness peaked near $45 billion in early July. Weeks later it held about $10 billion.

The fund borrowed heavily. Its leverage ran as high as four times its own capital, which magnified every move.

It bet on AI infrastructure and against software. When chip and memory stocks slid, small losses turned large fast.

Its main holdings each fell more than 35% during the month. Goldman Sachs, JPMorgan Chase and Bank of America then demanded more collateral.

The fund could not meet those calls. It sold its whole public stock book, and Citadel took that leveraged equity portfolio at roughly a 10% discount.

The forced selling stopped. The same stocks bounced. Citadel already owned them.

A Playbook Griffin Has Run for 20 Years

None of this is new. In July 2007, Sowood Capital lost half of its $3 billion in under a month. Citadel bought its positions and profited as markets recovered.

A year before that, Amaranth Advisors collapsed on natural gas bets. Its energy book went to Citadel and JPMorgan.

The pattern is consistent. Griffin waits for a seller with no options, then names the price.

Aschenbrenner, 25, had returned 439% through June and more than 1,000% since launching in July 2024. His fund survives on private holdings, including a stake in Anthropic worth about $5 billion.

Citadel has booked the gain but not sold the stocks. The volatility that broke Situational Awareness now sits on its own books.

August earnings from those same AI names will show what the discount was really worth.

The post 3 Citadel Funds Soar After Buying Situational Awareness’s Distressed AI Stocks appeared first on BeInCrypto.

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