Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.

All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

Bitcoin bridge Boltz, which recently suspended its services after repeated attacks from AI-powered hackers, has come under fire after it allowed its warrant canary to lapse for over five days.

The lapse indicates to several critics that Boltz is possibly under government investigation.

A warrant canary is a colloquial term for a recurring public notice that a service has not received a secret legal process.

Because subjects of a legal or criminal investigation often may not lawfully disclose service of legal proceedings once a process server or law enforcement agency begins work, developers proactively and periodically state that they have not received such service by renewing their warrant canary.

A missed renewal of a warrant canary, including silence after a regular time period, is an alarm that something is amiss. Boltz’ own text told readers to “assume the worst” if it failed to renew on-time.

Boltz renewed its warrant canary notice today with a valid, PGP-signed message that claims zero government data demands. A defender said the team simply forgot during the swap freeze.

Not everyone was convinced, and the timing was unfortunate.

Indeed, Boltz is in the middle of a proverbial five alarm fire this week.

It just told users its Boltz Swap Service for bridging BTC between mainchain, Liquid, and Lightning Network, will stay disabled “until further notice.” 

It said it had suffered months of “AI-assisted probing” with attackers able to “iterate faster than a team our size can find and patch.”

Critics took the combination of its service suspension plus its warrant canary lapse as a signal of duress.

Read more: Ethereum Foundation ditches ‘warrant canary’

Advertisement

What happened during Boltz’s lapsed warrant canary?

Companies that used the Boltz Swap Service, such as Bull Bitcoin, warned that Lightning payments and liquid-to-BTC swaps in its wallet would fail. Aqua and other Boltz-dependent Lightning wallets hit the same brick wall.

Boltz’ prior signed canary dated itself May 31. It promised a 60-day refresh, a timeframe that closed on July 30.

Swaps went dark on August 3. It didn’t sign a new canary until August 5.

Its renewal message now claims, “0 requests for information of any kind by any third parties including but not limited to government agencies.”

Advertisement

Besides the time lapse, everything else checks out normally. An admin published the valid, PGP-signed notice. As usual, it included a latest BTC block hash for a timestamp.

On social media, Adam Simecka, a vocal critic, cast the stale canary as an “authenticated Deadman Switch.” It warned, he claimed, that “a government agency has taken over Boltz.”

There was probably no AI attack, he opined, claiming that was a ruse for “a state-level attack.”

Later he urged followers to “Ignore any further communication from them,” arguing that its workers were “likely captured and being held at gunpoint (hopefully not literally).”

Advertisement

A Stacker News post flagged the same gap a day earlier. It noted Samourai Wallet’s canary history and quoted Boltz’ own “assume the worst” line from its prior canary.

The alarm rang, and Boltz scheduled it in advance

A defender rejected the coup theory. They highlighted that canary renewals are “a manual process,” and that the absentminded lapse is unremarkable given that Boltz is “offline and fighting for survival.”

The team “simply forgot about the update. Nothingburger,” this defender continued.

Others dismissed panic as sensational, calmly reminding alarmists that the canary had already been updated within a reasonable timeframe.

Advertisement

By design, warrant canaries are blunt instruments. They work with infrequent communication and promise periodic attestations of a negative, even though they are merely words on a computer screen.

When they lapse, that negative reality becomes a possible reality.

Boltz chose the strictest possible warning language in its own version — “assume the worst” — then missed its own deadline.

Even though its renewed canary still says zero government demands, whatever happened during the days in which it lapsed are what everyone is debating today on social media.

Advertisement

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.

Minneapolis Fed President Neel Kashkari backed gradual interest rate increases as persistent inflation and uncertainty around the Strait of Hormuz complicate the outlook for US monetary policy.

Kashkari calls for gradual Fed rate hikes

Kashkari said during a CNBC interview on Wednesday that the central bank should begin moving interest rates higher as inflation remains above its target.

“I think now is the time to start slowly moving rates up,” Kashkari said.

The Minneapolis Fed president argued that current monetary policy does not appear particularly restrictive. He pointed to strong corporate earnings and continued economic resilience as signs that higher borrowing costs have not placed substantial pressure on demand.

Kashkari clarified that he was not advocating a series of aggressive increases. Instead, he supported incremental moves intended to reduce inflation without causing an unnecessary slowdown in the US economy.

His remarks add to a growing debate inside the Fed over whether rates are high enough to contain renewed price pressures. Kansas City Fed President Jeff Schmid also called for tighter monetary policy on Wednesday, although he did not specify when or by how much rates should rise.

Fed’s July decision exposed a widening policy split

The Federal Open Market Committee maintained the federal funds rate at 3.50%–3.75% during its July 28–29 meeting.

Kashkari, Cleveland Fed President Beth Hammack, and Dallas Fed President Lorie Logan opposed the decision. All three preferred an immediate quarter-point increase, according to the Federal Reserve’s official statement.

Kashkari later said the dissent reflected his view that policymakers should begin a gradual tightening cycle rather than deliver a sharp increase.

The three dissents showed that concern over inflation is spreading among policymakers. The Fed remains committed to returning inflation to 2%, but higher energy costs and resilient demand have made that task more difficult.

Kashkari said the September decision would depend on inflation reports released before the meeting and developments in the US-Iran conflict. Those factors could determine whether the Fed holds rates steady again or delivers its first increase of the year.

Hormuz uncertainty keeps inflation risks elevated

Disrupted shipping through the Strait of Hormuz has increased energy costs and added another layer of uncertainty to the Fed’s outlook. The waterway remains central to global oil and liquefied natural gas shipments.

Iran and Oman have reached a preliminary understanding on the coordinates of a possible shipping route through the strait. However, negotiations remain incomplete, and the proposed arrangement does not guarantee safe passage, Reuters reported.

President Donald Trump said an agreement to reopen the waterway could arrive this week. A reduction in regional tensions could lower energy prices and ease some inflation pressure, but Kashkari said the Fed must assess the incoming information before committing to a September move.

Continued disruption would create the opposite risk. Higher fuel and transportation costs could spread across the US economy, strengthening the case for tighter monetary policy.

Crypto traders still lean toward a September hold

Polymarket traders placed the probability of a 25-basis-point September increase at about 46%, while the chance of no change stood near 53% when observed. Prediction-market prices change continuously and later moved closer to an even split.

A separate Polymarket contract assigned a 64% probability to at least one rate increase before the end of 2026. That leaves the October and December meetings as possible alternatives if the Fed decides September is too early.

Bitcoin (BTC) traded near $64,700 on Wednesday, holding above its intraday low near $63,900. The move did not establish a direct reaction to Kashkari’s remarks, but the rate outlook remains important for crypto investors.

Higher rates can strengthen the dollar and reduce liquidity available for risk assets, creating pressure on Bitcoin and other cryptocurrencies. A September hold could offer short-term relief, although persistent inflation may keep the prospect of a later increase in focus.

Upcoming inflation data, the July employment report and developments around the Strait of Hormuz will shape expectations before the Fed’s Sept. 15–16 meeting.

Strategy will contribute $250 annually to Trump Accounts for eligible children of its U.S. employees, expanding its benefits beyond its core Bitcoin treasury operations.

Strategy adds Trump Accounts to employee benefits

Strategy announced on Aug. 5 that it had joined the Invest America Business Pledge, committing to fund Trump Accounts for the children of its U.S. workers.

The company will contribute $250 each year for every eligible child under 18, regardless of the child’s birth year. For children born on or after Jan. 1, 2025, Strategy will also provide a one-time $1,000 contribution matching the U.S. government’s initial deposit, according to the company’s announcement.

Strategy CEO Phong Le said the program could promote financial education and longer-term saving among American families.

“Trump Accounts and the Invest America initiative can help build a stronger financial future for America’s children.”

Le said Strategy’s contributions would supplement the government deposit and give eligible children another source of long-term investment capital.

The Bitcoin treasury company announced the benefit internally during its quarterly Company Day. It plans to provide enrollment information to employees before contributions begin.

Trump Accounts provide $1,000 for eligible children

Trump Accounts, formally known as Section 530A accounts, are tax-deferred investment accounts for children. The accounts invest in low-fee funds tracking the S&P 500 or another index composed mainly of U.S. equities.

Under the federal pilot program, U.S. citizen children born between Jan. 1, 2025, and Dec. 31, 2028, can receive a one-time $1,000 Treasury contribution. Children must have valid Social Security numbers and an account election submitted on their behalf, according to the Internal Revenue Service.

Children outside that birth window can still have Trump Accounts opened before they turn 18, although they do not qualify for the federal seed payment. Strategy’s recurring $250 contribution will apply to eligible children regardless of their birth year.

Employers, family members and other authorized parties may add funds subject to federal limits and tax rules. The structure is intended to give children long-term exposure to U.S. equity markets while restricting access during childhood.

Strategy said its benefit will not start until the Treasury and IRS publish final implementation guidance and the necessary payroll, custodial and recordkeeping infrastructure becomes available.

The company joins Coinbase, Goldman Sachs, Morgan Stanley and other U.S. employers that have pledged contributions to the program.

Strategy’s Bitcoin holdings remain under scrutiny

The employee benefit announcement arrived as investors continued watching Strategy’s evolving Bitcoin treasury activity.

Strategy confirmed that it sold 1,638 BTC between July 27 and Aug. 2 for $104.73 million after fees. The Bitcoin was sold at an average price of $63,957.

The company used about $52.4 million to cover preferred stock dividends and directed roughly $52.3 million toward STRC preferred-share repurchases. Following the sale, Strategy reported holding 842,138 BTC acquired for $63.51 billion at an average cost of $75,419 per coin.

As crypto.news reported, Lookonchain later identified another transfer of 1,030 BTC, valued at about $66.14 million, from wallets it associated with Strategy.

Strategy has not confirmed that the Aug. 5 movement represented another sale. Bitcoin transfers may reflect custody changes, internal wallet restructuring or settlement activity without changing ownership.

Treasury guidance will determine the launch date

Strategy has not provided a firm starting date for the employee contribution program. Its rollout depends on final federal rules and the availability of systems allowing employers to deposit money into the accounts.

The company said it would share enrollment instructions with eligible workers ahead of the launch. The final guidance will also determine how employer contributions are administered and treated for federal tax purposes.

Until then, the $250 annual payments and matching $1,000 contributions remain corporate commitments rather than active employee deposits.

The window for US Congress to pass a comprehensive market structure bill on cryptocurrencies is closing, with the Senate set to go on recess in a matter of days, and lawmakers still have not announced clear plans to vote on the legislation.

In a Wednesday X post, Senator Cynthia Lummis said she anticipated that the Senate would vote on the Digital Asset Market Clarity (CLARITY) Act before the chamber breaks for its month-long August recess. The Wyoming lawmaker has been one of the biggest proponents for the crypto bill, which has split many members of Congress and industry leaders over different provisions on ethics, stablecoins and tokenized equities. 

“It’s just time to get people on the record,” said Lummis.

The CLARITY Act, which has been under consideration in the Senate since its passage in the House of Representatives in July 2025 with a 294-to-134 vote, still faces opposition from many Democrats looking for stronger ethics provisions affecting US President Donald Trump’s investments. The president has been under additional scrutiny since he disclosed he earned more than $1.4 billion from investments tied to digital assets in 2025.

Related: CLARITY Act failure could send crypto valuations lower: Bernstein

60-vote hurdle needed to pass CLARITY

As of Wednesday, Senate Democrats’ calendar showed no vote scheduled for CLARITY, giving the chamber only a few business days to resolve the matter. However, Senate Majority Leader John Thune, the Republican lawmaker who would have the authority to schedule a vote, is reportedly still planning to do so before Saturday. The bill would need 60 votes in the Senate to invoke cloture and end a filibuster, allowing it to advance in Congress.

The bill also faces opposition from at least one Republican lawmaker, according to a recent Politico report. Senator Josh Hawley will reportedly withhold voting in favor of the bill until it addresses concerns from banks. Although lawmakers did reach a compromise on the bill with banking groups over stablecoin yield, some industry leaders have continued to push for provisions requiring crypto companies to have comparable licensing and restrictions as banks. 

After Friday, the Senate will be on recess until mid-September, pushing consideration of the crypto bill into the lead-up to the 2026 midterm elections.

Magazine: Here’s why the CLARITY Act’s ethics deal may be so hard to reach

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.