A range-proof cache bug in the Elements codebase let an unknown actor mint unbacked L-BTC, drain 95% of the federation reserve through SideSwap, then negotiate its return on-chain via OP_RETURN messages. The network remains frozen, 598.5 BTC sits in the attacker’s wallet, and the entire federated sidechain model faces the hardest questions it has ever had to answer.

Sunday afternoons are not supposed to feel like bank runs. Yet on Sept. 6, 2026, anyone watching the Liquid Network federation wallet saw something that looked a lot like one: 3,996 BTC leaving in a single peg-out transaction at 14:28 UTC, collapsing the reserve from 4,205 BTC to 202 BTC in less than half a minute. At prevailing prices, that was roughly $320 million. Gone.

What followed over the next 30 hours was one of the strangest episodes in Bitcoin’s history. The person or group behind the drain did not disappear into a mixing service. They wrote “we are whitehats. contact us on chain” in an OP_RETURN field, opening a public negotiation with Blockstream that anyone with a block explorer could read in real time. Nine messages went back and forth. A PGP key was verified. Bridge nodes were patched. And then 3,400 BTC came back, leaving 598.5 BTC, about $47 million, sitting in an address that nobody controls except the attacker.

The mechanics of what happened are technical. The implications are not. Liquid is the oldest Bitcoin sidechain, operated by a federation of 15 functionaries running tamper-proof hardware security modules in an 11-of-15 multisig arrangement. It has processed billions in volume for exchanges, traders, and tokenized asset issuers since its launch in 2018. Now its reserves are short by $47 million, its reputation is in intensive care, and the broader question of whether federated sidechains can be trusted with real money is louder than it has been at any point in the past eight years.

How the range-proof cache bug worked

To understand the exploit, you need to understand how Liquid hides transaction amounts. Liquid uses confidential transactions, a cryptographic scheme where the value in each output is hidden behind a Pedersen commitment. Range proofs verify that the hidden amount falls within an allowed range without revealing what the amount actually is. This is computationally expensive, so Elements, the Bitcoin Core fork that powers Liquid, caches successful verification results for reuse.

The problem was in how the cache stored those results. Before the patch, the cache key was derived from the proof bytes and hidden amount alone. Asset type and scriptPubKey context were not included. That meant a previously verified proof could be replayed in a context where it should not have been valid.

The attacker exploited this by planting 68 identical range proofs across 14 hours between Liquid blocks 4,049,384 and 4,050,246, spending 41 satoshis per transaction. Each carried an OP_RETURN output with L-BTC written plainly but the amount hidden, using a commitment to zero with the simplest possible blinding key. Once those proofs were cached, the attacker constructed an invalid output that matched the cache key of a previously valid check. Federation nodes retrieved the cached result and skipped the verification that should have rejected the inflationary output.

At Liquid block 4,050,336, the attacker created approximately 3,996 L-BTC out of nothing. Those tokens looked valid to every federation functionary running the vulnerable code. The attacker sent them to SideSwap’s peg-out service, which burned the L-BTC and requested payment from the federation. The federation obliged, releasing 3,996.0183 BTC to the attacker’s Bitcoin address.

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The team isolated liquidity on BSC and Base, disabled bridging, and is preparing a compensation plan for affected LPs pic.twitter.com/zEktGZJbNG

— crypto.news (@cryptodotnews) August 23, 2026

The fix, which binds the cache verification to both asset type and scriptPubKey, had been committed to the Elements master branch on Aug. 3 and merged on Sept. 2. But it had never appeared in a tagged release. The federation nodes were running version 23.3.3, dated April 13, which did not include the patch. Mononaut, the mempool.space developer, noted that federation functionaries accepted the exploit transactions, approved the withdrawals, and continued building blocks, while other nodes running different code rejected the invalid transactions entirely.

DeFi has lost more than $1.3 billion to hacks in 2026, with compromised private keys overtaking smart contract bugs as the leading attack vector for the first time on record. The Liquid exploit does not fit neatly into either category. No keys were stolen. No smart contract was drained. A caching optimization in transaction verification logic left a gap wide enough for someone to mint $320 million.

The 23 minutes that emptied the vault

The attacker was not reckless, and the on-chain record shows a methodical dry-run sequence that preceded the main event by two full days.

On Sept. 4, two small peg-in transactions totaling 2.15 BTC entered Liquid. Two days later, on the morning of Sept. 6, three dry-run peg-outs moved 0.95, 1.71, and 0.55 BTC through SideSwap between 11:30 and 13:16 UTC. Each one completed without issue. The peg-out mechanism worked. The federation signed. Real BTC arrived on the other side.

At 13:53 UTC, the main event: the minting transaction created roughly 4,000 unbacked L-BTC. At 14:28:56 UTC, the federation processed the peg-out, releasing 3,996.0183 BTC. SideSwap forwarded 3,995.99999857 BTC to the attacker’s final address in the same block. The SideSwap fee of 0.1%, roughly 3.996 BTC, plus the three dry-run payouts of 3.21 BTC combined, were the only friction in the entire operation.

From mint to peg-out to receipt, the elapsed time was approximately 35 minutes. From the moment the federation signed the peg-out to the moment the Bitcoin reached the attacker, it was a single block.

The reserve cliff is visible on any blockchain analytics dashboard. Liquid’s federation wallet held 4,205.29 BTC at 14:27 UTC. One minute later, it held 202.63 BTC. It is the most dramatic single-transaction reserve drain in the history of Bitcoin sidechains.

On-chain negotiation: nine messages in OP_RETURN

What happened next turned a catastrophic exploit into something closer to a hostage negotiation conducted entirely in public.

At 18:30 UTC on Sept. 6, roughly four hours after the drain, the attacker embedded a message in a Bitcoin transaction: “we are whitehats. contact us on chain.” The choice of communication channel was deliberate. OP_RETURN messages are permanent, public, and verifiable. Neither side can fake the origin of a message sent from an address they control.

Blockstream responded at 19:31 UTC with a straightforward request: “Please contact [email protected].” The attacker ignored the email offer.

At 03:30 UTC on Sept. 7, after Liquid had halted block production at 04:49 UTC, the attacker sent a longer message: “Please fix the bug first. The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix.”

This was not a ransom demand. It was a security disclosure with $320 million in collateral. The attacker wanted proof that the vulnerability was closed before returning funds that could theoretically be re-exploited by someone else.

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CertiK reported 2,843 ETH and $1.6M DAI concentrated at one address following the exploit pic.twitter.com/ujL8QtFok3

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— crypto.news (@cryptodotnews) August 24, 2026

Blockstream spent the next several hours patching bridge nodes across the federation. At 09:04 UTC on Sept. 7, Blockstream sent a PGP-signed message: “Bridge nodes are patched, safe to return the funds.” The signature verified against the security key ending 6844 A2D6 published at blockstream.com/pgp.txt. Seven total verified Blockstream messages were sent from fresh addresses over the course of the negotiation.

At 16:09 UTC on Sept. 7, the return transaction landed: 3,400 BTC back to the federation address. The remaining 598.5 BTC stayed in the attacker’s wallet. The final OP_RETURN message from the attacker, sent at 21:03 UTC, contained a single emoticon: “:(“

That frowny face has become one of the most analyzed two characters in Bitcoin history. Was it regret at having to keep any amount at all? Disappointment that the bug existed in the first place? A sardonic comment on the state of sidechain security? Nobody knows, and the attacker has not communicated since.

The $47 million question: bounty or theft

The 598.5 BTC the attacker retained is worth approximately $47 million. There was no formal bug bounty program covering this vulnerability. There was no contract, no prior agreement, and no legal framework governing the situation.

Liquid’s attackers offered to return most of the 4,000 BTC, and they did. But “most” is doing heavy lifting in that sentence. Keeping 15% of a $320 million exploit without any prior agreement is not what most security researchers would call standard white-hat behavior.

Charles Guillemet, CTO of Ledger, was among the first prominent voices to push back on the white-hat framing. His argument was direct: genuine white hats disclose a flaw before moving hundreds of millions in collateral, not after. Draining 95% of a network’s reserves and then demanding a patch before returning anything resembles extortion more than it resembles security research.

The counterargument, and it is not a weak one, runs like this: the attacker found a live vulnerability that could have been exploited by a malicious actor at any time. By draining the funds and holding them, they prevented a black-hat from doing the same thing with no intention of returning anything. The 598.5 BTC is compensation for a service rendered, not a ransom paid under duress.

Both positions have precedent. The 2022 Wormhole exploit saw the attacker keep $320 million with zero returned. The 2023 Euler Finance hack resulted in a full return after on-chain negotiation. The Ronin bridge exploit in 2022 saw state-backed attackers from North Korea’s Lazarus Group take $624 million with no negotiation at all. Against that backdrop, getting 85% back within 30 hours looks like one of the better outcomes in the history of crypto exploits.

The legal question remains open. Unauthorized access statutes in most jurisdictions do not include a “good intentions” exception. Taking funds without authorization and then returning most of them may satisfy the definition of theft regardless of what the attacker writes in an OP_RETURN field. Whether any law enforcement agency will pursue the case, given that the majority of funds were returned, is a different matter entirely.

Why federation nodes ran unpatched code

This is the part of the story that should concern anyone who uses a federated system.

The fix for the range-proof cache bug was committed to the Elements repository on Aug. 3, 2026. It was merged into the main branch on Sept. 2. Four days later, the exploit happened. The federation nodes were running version 23.3.3, released on April 13, which predated the fix by nearly five months.

The gap between “fix merged” and “fix deployed to production” is a familiar problem in software engineering. It is also a problem that is supposed to be mitigated by the entire structure of a federated sidechain. Liquid’s 15 functionaries operate specialized hardware security modules. They run tamper-proof servers. They manage an 11-of-15 multisig wallet designed to tolerate up to four compromised or offline signers. The security model assumes that the federation is competent, well-resourced, and running current software.

Running unreleased development code is one kind of risk. Running code that is five months behind a critical security fix is another. Neither inspires confidence.

Liquid Network recovered 3,400 BTC after the bridge exploit, but the recovery came from the attacker’s goodwill, not from any federation safeguard. If the attacker had been a Lazarus Group operator, the 3,996 BTC would have gone through a mixer within hours and the Liquid Network would have been insolvent with no path to recovery.

The question that Blockstream has not yet answered publicly is why a patch that had been merged for four days and committed for over a month was not deployed to federation nodes. Sidechain security is only as strong as the weakest link in its operational chain. For Liquid, that weakest link turned out to be a software update that sat in a repository while the vulnerability it fixed sat in production.

The DAO parallel: when code breaks trust

The comparisons to the 2016 DAO hack started within hours of the Liquid drain, and they are worth taking seriously.

In June 2016, an attacker exploited a reentrancy bug in the DAO smart contract to drain 3.6 million ETH, worth roughly $60 million at the time. The Ethereum community faced a choice: accept the exploit as a valid outcome of the code or hard fork the network to reverse the transaction and return the funds. Ethereum chose the fork. Ethereum Classic, the unforked chain, survived as a philosophical statement that code is law and exploits are just the market correcting for bad code.

The Liquid situation rhymes but does not repeat. Bitcoin’s base layer was never at risk. The exploit happened entirely within the Liquid sidechain, and the peg-out mechanism that released real BTC was functioning exactly as designed. It released funds because the federation nodes told it the request was valid. The federation nodes said the request was valid because their verification cache had been poisoned by a bug that should have been patched.

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The team will cancel unauthorized transfers via pre-attack snapshot and reissue BB as a BEP-20 token with automatic distribution to holders pic.twitter.com/Bo9jf07JLs

— crypto.news (@cryptodotnews) August 23, 2026

There is no fork debate here because there is nothing to fork. Liquid is a federated sidechain, not a proof-of-work chain with independent miners. Blockstream can patch the code, restart the bridge nodes, and resume operations. The 598.5 BTC that the attacker kept is gone. It left the Liquid system through a legitimate peg-out and now exists on the Bitcoin base layer, where it is subject to the same rules as any other Bitcoin. No amount of federation governance can claw it back.

But the DAO parallel holds in a deeper sense. Both incidents forced their respective communities to confront the gap between the security model they believed they had and the security model they actually had. Ethereum believed smart contracts were trustless. Liquid’s users believed a federation of 15 functionaries running hardware security modules was safe enough. Both assumptions died on contact with a sufficiently motivated attacker.

The opposing case: federated sidechains still work

It is worth making the bull case for Liquid and federated sidechains at full strength, because the bearish narrative writes itself and the truth is more complicated.

First, the peg-out worked exactly as designed. The federation signed a transaction that looked valid according to the rules it was running. The bug was in the verification logic, not in the signing logic, the key management, or the HSM infrastructure. Blockstream’s core security architecture, the 11-of-15 multisig with tamper-proof hardware, was never breached.

Second, the attacker returned 85% of the funds within 30 hours. Compare that to the Bybit hack in February 2025, where Lazarus Group stole $1.4 billion and returned nothing. Compare it to the Ronin bridge, where $624 million vanished into North Korean laundering networks. Compare it to the Coldcard hardware wallet exploit that drained $130 million in July 2026 with no possibility of recovery. Liquid’s outcome, while painful, is among the best that any exploited protocol has achieved.

Third, the vulnerability was a software bug, not a design flaw. Range-proof caching is an optimization, and the fix is straightforward: include asset type and scriptPubKey in the cache key. The patch already exists. Once deployed, this specific attack vector closes permanently.

Fourth, other assets on Liquid, including USDT, DePix, and tokenized real-world assets, were unaffected. The exploit targeted the BTC peg-out mechanism specifically. Users holding L-USDT or other Liquid-issued tokens did not lose funds.

The counterargument to all of this is simple: “It worked as designed” is cold comfort when the design allowed $320 million to walk out the door. A system that depends on 15 organizations keeping their software up to date has 15 potential points of failure. And the fact that recovery depended on the attacker’s goodwill, not on any protocol safeguard, is not a feature of the security model. It is the absence of one.

What this means for every federated bridge

The Liquid exploit lands at a moment when the Bitcoin sidechain and Layer 2 ecosystem is more crowded and more ambitious than it has ever been.

Stacks, which upgraded to the Nakamoto release in late 2025, uses a different security model tied to Bitcoin finality. The Lightning Network operates as a true Layer 2 with channel-based security that does not depend on a federation. Fedimint, the federated e-cash protocol, uses a similar federation structure to Liquid but for custodial Bitcoin custody rather than a full sidechain. RSK, another federated sidechain, shares many of Liquid’s architectural assumptions.

For every project that uses a federation, the Liquid exploit is a wake-up call. The question is not whether federation members can be trusted with private keys. The question is whether federation members can be trusted to run current software, respond to security disclosures in time, and maintain operational discipline across 15 independent organizations with different priorities, different IT teams, and different levels of urgency.

Protocol halts after exploits are becoming routine across the industry. The Liquid freeze is more consequential than most because it affects a Bitcoin-native sidechain that institutional players have used since 2018. If Liquid cannot guarantee that its federation is running patched software, then the trust advantage that a known, regulated federation is supposed to provide over anonymous validators or decentralized bridges collapses.

The broader lesson is one that the DeFi ecosystem has been learning the hard way since 2020: operational security is not a feature you ship once. It is a process you execute every day. Bugs will be found. Patches will be written. The question is whether the patch reaches production before the attacker reaches the peg-out. On Sept. 6, 2026, the answer was no.

What to watch

• Federation node software versions: Whether Blockstream implements mandatory version checks or automated update mechanisms for functionary nodes will signal how seriously the operational gap is being addressed.
• L-BTC depeg recovery: The reserve backing ratio dropped to roughly 86 cents per L-BTC after the return. Watch for how quickly confidence and peg stability return once bridge nodes reopen.
• The 598.5 BTC wallet: On-chain trackers will monitor the attacker’s retained funds for movement. Any attempt to mix or spend will provide forensic data about the attacker’s identity and intentions.
• Legal and regulatory response: Whether any jurisdiction opens a criminal investigation will set precedent for how self-declared white-hat exploits are treated when no formal bounty agreement exists.
• Competing sidechain and L2 adoption: If institutional users migrate volume from Liquid to Lightning, Stacks, or centralized settlement layers in the wake of the exploit, it will be visible in on-chain metrics within weeks.

Disclaimer: This article was published on Sept. 7, 2026, and reflects information available at the time of writing. The situation around the Liquid Network exploit is developing. Readers should verify current status through official Blockstream channels before making any decisions related to Liquid Network assets.

The Clarity Act has faced a new threat ahead of its Sept. 15 procedural vote, with Republican senators warning that the measure may lack the 60 votes needed to advance.

Clarity Act faces a difficult Senate vote

Semafor reported on Tuesday that Republican senators expect the Clarity Act to fail when the Senate returns from its five-week recess, citing unresolved disputes over ethics rules and other parts of the bill.

Sen. Cynthia Lummis, R-Wyo., responded on X by arguing that Democrats, rather than ethics concerns, would be responsible if the legislation falls short. Lummis has been one of the Senate’s most vocal supporters of federal rules for digital assets.

“If this bill fails it won’t be because of ethics, it will be because Democrats didn’t join Republicans in embracing a bipartisan bill that protected consumers, cements America’s leadership in digital assets, and empowered law enforcement to clamp down on illicit finance,” Lummis wrote.

The Wyoming senator said Democratic negotiators continued to seek provisions that could let later administrations “kill the crypto industry.” While saying the remaining differences could still be resolved, Lummis placed the responsibility for further concessions on Democrats rather than the Trump administration.

“If we can bridge those gaps I’m confident we can pass Clarity, but they require further compromise from Democrats, not the White House.”

Sen. Mike Rounds, R-S.D., told Semafor that the situation “does not look good right now.” Sen. Thom Tillis, R-N.C., offered a different assessment, saying the bill would fail if the White House showed no interest in closing the gap over ethics language.

A White House spokesperson told Semafor that President Donald Trump remained committed to passing the legislation and had accepted what the administration described as a far-reaching ethics provision. Democratic negotiators have disputed whether the proposed language adequately covers crypto businesses linked to a president’s relatives.

Ethics demands remain a central obstacle

Democrats have sought restrictions preventing senior government officials from promoting or earning money from digital assets while holding office. A draft circulated in July included new ethics language, but a group of Democratic senators said the changes did not go far enough.

Their concerns have focused in part on digital-asset businesses connected to Trump and his family. Trump-linked projects include World Liberty Financial and the Official Trump meme coin, while critics have questioned whether a president should be able to profit from an industry affected by White House policy.

Public Citizen previously called for rules requiring a sitting president and immediate family members to divest from crypto ventures, as crypto.news covered in August. The consumer advocacy group argued that leaving family-controlled businesses outside the restrictions would weaken the proposed safeguards.

Lummis has previously said she supported adding ethics provisions and had placed her relationship with Trump under strain to help secure bipartisan backing. Even after those changes, however, Democratic senators continued to seek amendments addressing consumer protection, illicit finance, and presidential conflicts of interest.

The dispute matters because Senate Republicans cannot advance the bill without support from the other side of the aisle. Republicans hold 53 seats, while the procedural vote requires 60 votes to open debate. Supporters would therefore need at least seven Democrats or independents if every Republican voted in favor.

Full Republican support is also uncertain. Some Republican senators have raised separate concerns about stablecoin rewards and protections for banks, which could increase the number of Democratic votes needed.

Stablecoin rewards and DeFi rules add pressure

Apart from ethics, senators remain divided over whether exchanges and related companies should be allowed to provide rewards on stablecoin balances. Banks have argued that interest-like payments could pull deposits away from federally insured institutions, while crypto companies have opposed rules that would block rewards offered by third parties.

The dispute continued even after the GENIUS Act established federal requirements for payment stablecoin issuers in 2025. Under the market structure negotiations, lawmakers have considered separating prohibited interest payments from rewards linked to transactions, payments or liquidity activity.

DeFi protections form another unresolved part of the talks. Crypto industry groups have supported safeguards for developers who publish non-custodial software without controlling customer funds, while critics have sought stronger tools for pursuing illicit financial activity conducted through decentralized protocols.

Recent coverage of the Senate vote identified presidential ethics, DeFi developer liability and stablecoin rewards as the three disputes most likely to prevent the bill from reaching the required 60-vote threshold.

For U.S. crypto holders and businesses, the bill would determine how the Securities and Exchange Commission and Commodity Futures Trading Commission divide authority over digital assets. Its framework would establish a process for deciding whether a token falls under securities law or qualifies as a digital commodity.

Trading platforms handling digital commodities would come under CFTC oversight, while the SEC would retain authority over digital securities and qualifying token offerings. The proposal would also create registration, customer-asset protection, and compliance requirements for digital-asset intermediaries.

House approval does not guarantee passage

The House of Representatives passed its version of the Digital Asset Market Clarity Act in July 2025 with bipartisan support. Senate lawmakers have since worked on their own language, meaning any revised bill would still have to clear several procedural and legislative steps.

Senate Majority Leader John Thune filed cloture before lawmakers left Washington for their August recess. The motion is scheduled to come before the chamber at 2:15 p.m. ET on Sept. 15, one day after senators return.

The first vote will decide whether the Senate opens debate rather than whether it grants final approval. If the measure clears cloture, senators could consider amendments before holding a vote on passage.

Any Senate-approved text that differs from the House version would then require further action. The House could accept the Senate text, or lawmakers from both chambers could negotiate a common version that would need another round of approval before reaching Trump’s desk.

Time on the congressional calendar has added another obstacle. According to an analysis of the timetable, the Senate has limited working days available before campaigning intensifies ahead of the November midterm elections.

Trump pressed Congress to pass the bill in August, arguing that the legislation was needed for the United States to retain its leadership in Bitcoin and crypto. The White House told Semafor that the administration had continued working with lawmakers, while Lummis said passage would require more concessions from Senate Democrats.

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Circle has added upfront fee payments to CCTP Fast Transfer, allowing developers to quote and collect cross-chain USDC fees on the source network while preserving the amount delivered to recipients.

CCTP collects transfer fees before burning USDC

Circle’s official developer documentation says the process begins when an application requests a signed fee quote and submits it with the USDC burn transaction on the source blockchain.

Under the previous payment method, protocol fees could be deducted from the USDC minted for the recipient on the destination network. A user sending a set amount could therefore receive less than the figure entered at the start of the transaction.

The prepaid model separates the transfer amount from the fee. Once the transaction has been submitted, a CCTP smart contract checks the signed quote, collects the payment, and passes the transaction to TokenMessengerV2, which completes the USDC burn.

Circle then verifies the transfer and mints the full stated amount on the destination chain. A person sending 100 USDC, for example, can arrange for the recipient to receive 100 USDC while paying the related protocol charge separately on the originating network.

Developers can use the setup for the Fast Transfer fee, the Forwarding Service fee, or both. Fast Transfer allows USDC to reach another chain before the source transaction reaches full finality, while the Forwarding Service can deliver funds and complete an action on the receiving network.

CCTP itself moves native USDC through a burn-and-mint system. The protocol destroys the tokens on the source chain before issuing the same amount on the destination chain, avoiding the wrapped assets commonly used by conventional bridges.

A cross-chain bridge explainer published by crypto.news in August described CCTP as the largest implementation of this issuer-controlled model. Unlike a general-purpose bridge, the system depends on Circle deploying and operating its infrastructure on every connected network.

Circle Quote API combines two CCTP fees

Through the CCTP Quote API, an application sends the transfer amount, the source and destination domain identifiers, the selected payment token, and the fees it wants priced.

A PRE_FINALITY request covers the Fast Transfer charge, while a FORWARD request covers the Forwarding Service. Developers can place both requests in the same API call rather than calculating and presenting the charges through separate systems.

The response contains the total fee, a breakdown for each service, the payment token, and a signed quote that must accompany the onchain transaction. Circle binds the quote to the specified transfer amount and destination, while Forwarding Service quotes also depend on the destination caller and hook data.

If a developer changes one of the bound values before submitting the transfer, the transaction reverts. Each quote also carries an expiry time or source-chain block limit, requiring the application to obtain a new price when the original offer expires.

Circle’s current documentation lists an approximate two-minute validity period for most supported networks, including Arbitrum, Avalanche, Base, Linea, OP Mainnet, Polygon PoS, Sonic, Unichain and World Chain. Ethereum quotes have an estimated window of two minutes and 30 seconds, although Circle notes that the duration can change.

The signed quote gives the application the exact protocol cost before the burn is submitted. Developers can therefore show the user the transfer amount, fee, and final amount in advance, without estimating separate charges that may be deducted after the USDC reaches another chain.

Users can pay CCTP fees in USDC or native tokens

For payment, developers can select either USDC or the native gas asset of the source blockchain. Native-token payment is the default option, with the quoted amount attached to the transaction as its native value.

Choosing USDC requires the application to enter the stablecoin’s source-chain address in the request. The user must then approve the TokenMessengerWithFees contract to spend both the USDC being transferred and the additional USDC needed for the fee.

Although both amounts come from the sender’s balance in that case, the contract handles them separately. Only the transfer amount enters CCTP’s burn-and-mint process, while the prepaid fee is collected before the burn.

Using a native token can leave the sender’s USDC balance unchanged apart from the amount selected for transfer. The option may suit wallets and applications that already hold gas assets on the originating chain, while USDC payment allows developers to keep the transaction costs denominated in dollars.

For Forwarding Service transactions, the updated contract can also create the required cctp-forward hook automatically when the developer requests a forwarding quote without supplying custom hook data. Applications using custom instructions must submit the same hook data used when obtaining the signed quote.

Circle’s example implementation transfers 10 USDC from Base Sepolia to Arc Testnet and prepays both service fees. The company said developers can follow the same process for eligible EVM source networks and any destination supported by the Forwarding Service.

EVM requirement excludes Solana as a source chain

Upfront fee quotes currently require the transfer to start on an EVM-compatible blockchain. Circle’s API documentation says the source domain must support prepaid fees and meet any additional conditions attached to the requested service.

Fast Transfer quotes are available only when the source blockchain supports faster-than-finality settlement. Similarly, an application can request a forwarding fee only when the destination works with Circle’s Forwarding Service.

Solana cannot act as the source network for an upfront-fee transaction under the current setup because it is not EVM-compatible. Applications can still send USDC to Solana when the selected route and destination service are supported.

CCTP’s network footprint has continued to grow as Circle adds native USDC to more chains. In August, Circle launched CCTP on X Layer, taking the protocol to 26 blockchains while native USDC was available across 36 networks.

For institutional users, Circle connected Gateway with Fireblocks in July, allowing customers to manage a unified USDC balance across supported chains through Fireblocks’ controls, approval systems and transaction records.

American users remain subject to the terms of the platforms and applications through which they access CCTP. Circle’s USDC terms state that its U.S.-issued stablecoin is treated as stored value or prepaid access under applicable state money-transmission laws, while third-party support for USDC does not constitute Circle’s approval of that service.

StablecoinX appointed former Franklin Templeton digital asset executive Christopher Jensen as CEO, putting him in charge of the largest corporate holder of Ethena’s ENA token.

Jensen succeeds Ted Chen, who led StablecoinX through its public listing in June and will remain chairman of the company’s board.

StablecoinX, which trades on Nasdaq under the ticker USDE, is a publicly listed company focused on the Ethena ecosystem. Ethena issues USDe, a synthetic dollar that ranks as the fifth-largest stablecoin with nearly $4.4 billion in circulation, according to DefiLlama data. ENA, Ethena’s governance token, gives holders voting rights over changes to the protocol.

StablecoinX holds about 3.03 billion ENA tokens, roughly 20% of the token’s total supply, which the company says makes it ENA’s largest corporate holder.

Before joining StablecoinX, Jensen was a portfolio manager and director of digital asset research at Franklin Templeton, where he helped build the firm’s digital asset group after its launch in 2018. The asset manager’s blockchain venture fund participated in Ethena’s seed round, giving Jensen exposure to the protocol from its early stages.

The appointment comes about a week after Ethena launched Ethena Pay, a self-custodial app that lets users spend, save and transfer its USDe synthetic dollar.

The ENA token remains down about 20% year to date but has rebounded sharply in recent weeks, gaining more than 80% over the past month to trade around $0.16, according to CoinGecko.

ENA token price over the past month. Source: CoinGecko

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.

Robinhood’s blockchain network could become a major fee generator, with Bernstein analysts projecting up to $160 million in annual fees by 2028. In a report shared with Cointelegraph on Tuesday, the firm linked that outlook to rising activity around tokenized stock trading on the chain.

While memecoin-related trading dominated the Robinhood network at launch, Bernstein says the mix has shifted quickly: tokenized stock pairs now account for roughly 27% of total trading volume, while native memecoin pairs have fallen to 36% of network activity from 100% at launch on July 1.

Key takeaways

• Bernstein forecasts up to $160M in annual Robinhood chain fees by 2028, citing adoption of tokenized stock trading.
• Tokenized stocks now represent ~27% of trading volume on the network, up from a near absence at launch.
• Memecoin pairs have declined to 36% of activity from 100% at launch, indicating a changing trading mix.
• DefiLlama data shows the network has reached leading daily-fee status, with $2.13M in the past 24 hours.
• Tokenized equity offerings have faced public scrutiny, including criticism from AMC’s CEO.

Tokenized equities drive a changing fee engine

Bernstein’s central argument is that tokenized stock trading demand is becoming self-reinforcing on the Robinhood blockchain. According to the analysts, Uniswap automated market-making pools that pair memecoins with stock tokens can create what they describe as “reflexive demand” for both sides of those markets.

In practical terms, that mechanism matters because fees are typically earned from trading activity across liquid markets. If tokenized stocks continue to attract liquidity and paired trading flows, fee generation can scale beyond the initial wave of memecoin speculation that characterized the network’s early days.

Robinhood chain rises to top daily fees

The performance picture Bernstein references aligns with on-chain fee tracking. In a little over two months since launch, the Robinhood chain has climbed to the top of daily fee rankings, generating $2.13 million over the past 24 hours, according to DefiLlama’s fees by chain data.

That “early leader” status is important for investor expectations because it suggests the network’s revenue engine may be working immediately—rather than remaining a prolonged pilot stage. It also provides a measurable benchmark for comparing fee output with other chains during the same period, even as total market conditions remain variable.

Wall Street raises the bar on Robinhood shares

Bernstein’s Tuesday outlook follows a prior adjustment to its Robinhood valuation. On July 20, the firm raised its price target for Robinhood (HOOD) stock to $160 from $130 per share while maintaining an Outperform rating. That earlier update cited continued progress tied to prediction markets and tokenized equities.

In Tuesday’s premarket, Robinhood shares were little changed at last look, based on Yahoo Finance data referenced by Cointelegraph.

For readers, the key linkage is that Bernstein is framing tokenized assets not as a side experiment, but as a potential contributor to a broader revenue trajectory. If that thesis holds, the fee performance on-chain becomes one of the tangible indicators investors can monitor alongside traditional business metrics.

Tokenized equity controversy resurfaces

Not all reactions to Robinhood’s tokenized stock offerings have been positive. Earlier, Cointelegraph reported criticism from Adam Aron, CEO of AMC Entertainment Holdings, who said the tokenized stocks that provide economic exposure to AMC shares have no affiliation with the company.

Aron described the offering as “outrageous” and said AMC would request an investigation from its outside securities counsel. While the network’s trading mix appears to be evolving in ways Bernstein sees as economically constructive, the regulatory and corporate concerns around tokenized equities remain a clear uncertainty—particularly for issuers whose brand exposure may expand through tokenized wrappers.

That tension matters because it can influence how quickly tokenized stock offerings grow, how exchanges and issuers respond, and whether legal interpretations shift over time.

As the Robinhood chain continues to show high daily fees—backed by DefiLlama’s figures—investors and users will likely watch whether tokenized stock volumes keep expanding and whether the proportion of memecoin pairs keeps sliding further from launch levels. At the same time, the sustainability of tokenized equity activity may depend on how corporate objections and potential investigations develop, which could reshape the pace and scope of tokenized markets.

StablecoinX, the Nasdaq-listed company focused on the Ethena ecosystem, has named Christopher Jensen as its new chief executive officer. Jensen, formerly with Franklin Templeton’s digital assets team, will lead the firm’s management of ENA, Ethena’s governance token.

The appointment replaces Ted Chen, who guided StablecoinX through its June public listing and will continue to serve as chairman of the board. The CEO change places further emphasis on StablecoinX’s role as one of the largest institutional holders of ENA at a time when Ethena-related products are expanding.

Key takeaways

• StablecoinX appoints Christopher Jensen as CEO, tasked with running a major corporate stake in ENA.
• Ted Chen steps down as CEO but remains chairman after leading the firm through its Nasdaq listing in June.
• StablecoinX says it holds ~3.03 billion ENA tokens—about 20% of total supply—making it ENA’s largest corporate holder.
• Jensen’s background includes building Franklin Templeton’s digital asset group after its 2018 launch.
• The move follows Ethena Pay’s launch, a week after the self-custodial USDe spending and transfer app went live in dozens of countries.

What the leadership change signals for ENA holders

StablecoinX’s CEO transition matters because ENA is not a passive asset position. Ethena’s governance token provides voting rights over protocol changes, meaning large holders can influence how the system evolves. By placing Jensen at the helm, StablecoinX is effectively doubling down on governance-related oversight and strategic decision-making around Ethena’s broader roadmap.

According to the company, StablecoinX holds roughly 3.03 billion ENA tokens—around 20% of the token’s total supply—positioning it as ENA’s largest corporate holder. That concentration is precisely why governance outcomes attract attention from investors: changes to voting parameters, incentive structures, or protocol governance mechanisms can impact long-term token dynamics.

From Franklin Templeton to StablecoinX’s Nasdaq spot

Jensen joins StablecoinX after a long tenure at Franklin Templeton’s digital asset organization. The asset manager launched its digital asset group in 2018, and the report notes that Jensen helped build it, eventually serving as a portfolio manager and director of digital asset research.

StablecoinX’s appointment also highlights a direct connection between traditional asset management and Ethena’s early development. The report states that Franklin Templeton’s blockchain venture fund participated in Ethena’s seed round, giving Jensen exposure to the protocol before it became widely discussed across decentralized finance.

StablecoinX, meanwhile, trades on Nasdaq under the ticker USDE. The company is described as publicly listed and focused on the Ethena ecosystem, where Ethena issues USDe—an engineered, synthetic dollar that is reported to rank among the largest stablecoins. DefiLlama data cited in the article places USDe as the fifth-largest stablecoin by circulation, with nearly $4.4 billion in supply.

Why this comes right after Ethena Pay’s rollout

The leadership change arrives about a week after Ethena introduced Ethena Pay, a self-custodial app enabling users to spend, save, and transfer USDe. Earlier coverage linked to the appointment notes the product launch across 48 countries, expanding USDe’s utility beyond trading and custody into more everyday payment use cases.

While a CEO appointment is not automatically tied to product launches, the timing suggests a coordinated push toward ecosystem growth. For ENA holders and watchers, the practical question is whether the expansion of USDe on the consumer-facing side will translate into broader network participation—potentially affecting liquidity, adoption, and ultimately governance priorities.

Token performance: rebound alongside ecosystem momentum

The report also notes that ENA has been volatile. It remains down about 20% year to date, but has rebounded sharply in recent weeks—gaining more than 80% over the past month to trade around $0.16, according to CoinGecko.

That rebound matters for market participants because it often changes the attention placed on governance assets. When liquidity and sentiment shift, it can increase the number of participants monitoring governance votes, proposals, or shifts in token utilities. Still, the article does not attribute ENA’s price movement directly to StablecoinX’s leadership change, so investors should treat the correlation as circumstantial rather than causal.

What’s clear from the underlying facts is that StablecoinX’s governance exposure is large, and Ethena’s product expansion is ongoing. Together, those developments can affect how ENA is perceived—whether primarily as a governance instrument held by institutions, or as a token positioned for broader ecosystem activity driven by USDe utility.

Looking ahead, readers should watch for how Jensen’s strategy influences StablecoinX’s engagement with Ethena governance, as well as whether Ethena Pay’s rollout leads to measurable increases in USDe usage and participation across the ecosystem. The exact impact on ENA will likely depend on governance decisions and adoption metrics rather than any single corporate appointment.