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Crypto world faces growing pressure to relent on stablecoin rewards to win bigger prize

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Crypto world faces growing pressure to relent on stablecoin rewards to win bigger prize

If you break down what’s standing in the way of advancing the crypto sector’s top goal in Washington — Clarity Act legislation — the part of the debate that the industry can control is narrow: stablecoin rewards.

That’s not the only issue that could potentially derail the bill to finally establish a tailored legal footing for crypto markets in the U.S., but it’s the one in which industry insiders have a strong say. Companies such as Coinbase have been vigorously defending that business turf, wanting to keep giving customers incentives for engaging with stablecoins on their platforms.

But Wall Street banking lobbyists rolled in and made an argument that getting yield on stablecoin accounts is a lot like getting interest on savings accounts, and if the former kills the latter, the death of the deposit business means the strangulation of bank lending. That argument stuck with enough lawmakers on both sides of the aisle that it stopped the Senate’s Digital Asset Market Clarity Act in its tracks.

Heels have been digging in, and the resulting impasse will get harder to break as the weeks fly by, until the Senate’s own calendar quirks could effectively shove the whole mess toward 2027.

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Upper hand?

Until now, the crypto side has argued that it has the upper hand, because the crypto bill that already passed into law — the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act — seemed to allow third-party platforms such as Coinbase to offer rewards tied to other issuers’ tokens, such as Circle’s. However, a newly proposed rule from the Office of the Comptroller of the Currency that’s implementing GENIUS concluded that such relationships may violate the intent of the law, leaving the crypto world’s confidence a little shaken.

The last time the crypto and banking negotiators sat down with White House officials, President Donald Trump’s crypto advisers seemed to favor a compromise that would allow some rewards — not for merely holding stablecoins, but for actually using them for transactions and to support crypto infrastructure. Crypto insiders felt confident in their leverage, with GENIUS behind them and the White House favoring certain rewards.

But bank representatives haven’t necessarily seen the White House in the driver’s seat, because the White House doesn’t get a vote in advancing the Senate’s bill. The bankers haven’t yet raised their hands to move beyond their earlier position that virtually all categories of rewards need to be banned, despite the White House having set the end of February as an informal (unmet) deadline for compromise.

So where does that leave things?

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The banks can hold out, and if they continue to cast stablecoin rewards as an existential threat to the traditional financial system and Main Street lending, it could keep their allied lawmakers on their side at the fatal expense of the Clarity Act. What they risk is that the GENIUS Act remains the law of the land on this point. The OCC’s latest work may help bolster their confidence that strict rewards limits will be put in place, but that final agency rule would have to land on a very restrictive interpretation.

The crypto industry can also hold out, and if it can successfully lobby against the OCC’s proposed rule, it may still manage to preserve stablecoin reward programs it believes should be allowed under the wording of the GENIUS Act. But that may come at the cost of the Clarity Act, which is the single most important policy aim since the birth of crypto.

Regulations either way

Would an absence of Clarity mean that the industry continues without U.S. regulations? Probably not, because the U.S. markets regulators — the Securities and Exchange Commission and the Commodity Futures Trading Commission — are working on rules that will define their crypto jurisdictions. The drawback, though, is that it would be done without the foundation of new law, so the rules would be reasonably easy to peel back or revise under future leadership changes at those agencies.

As if that wasn’t enough for the crypto negotiators to consider, there’s this: If they were to capitulate somehow on stablecoin yield, and the bill advanced along party lines through the Senate Banking Committee (as it already was through the Senate Agriculture Committee), the crypto-industry sacrifice brings no guarantee the effort gets passed by the rest of the Senate.

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The problem is that Democratic senators have asked for some other significant points in this bill, and so far, those requests have gone unanswered. They want more vigorous defenses against illicit finance in crypto, especially focused on the decentralized finance (DeFi) space, and some of the Democrats’ past ideas were bashed by the industry as DeFi death threats. They also want politically dicey limits on the personal crypto business ties of senior government officials — most significantly, President Trump. And they demand that vacant Democratic seats get filled in the CFTC and SEC.

None of the points represent impassable roadblocks, but in the months of talks, they haven’t been cleared, yet. Some of the requests — such as commission nominations — would depend on willingness from the White House.

In the meantime, the clock is ticking away on 2026 Senate floor time for a major legislative accomplishment. Because this is a midterm election year, the lawmakers will scarcely be working in the Senate after the end of July. And apart from the scheduling practicalities, the nearness of hot-blooded campaigning erodes the chances of the parties getting together on a bill.

At this stage, insiders on the crypto side of the talks have expressed frustration over the unwavering position of the bankers, even as the digital assets businesses have seemed prepared to abandon stablecoin rewards on accounts in which the tokens are simply held (like a bank account). Still, people like Coinbase CEO Brian Armstrong (“We’re going to reach a win-win-win outcome“) and Ripple CEO Brian Garlinghouse (predicting 80% odds of passage) have sought to maintain industry confidence.

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That optimism seems to have kept Polymarket bettors favoring Clarity Act passage this year above a coin flip, currently at 70%.

In the coming weeks, the crypto industry may be forced to decide whether some kind of further sacrifice on stablecoin rewards is worth eliminating one of the major impediments to advancing a bill. And the banks may have to decide whether they can contend with the GENIUS Act’s treatment of stablecoins as it stands. So far, neither are moving, and tension is building.

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Kalshi uses ‘death carve-out’ to avoid paying out on Ali Khamenei ousting

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Kalshi uses 'death carve-out' to avoid paying out on Ali Khamenei ousting

Prediction market Kalshi apparently allowed traders to bet on the ousting of Iranian Supreme Leader Ayatollah Ali Khamenei, racked up $54 million in trades, then voided the result the moment he was killed in a US-Israeli airstrike.

Kalshi listed its “Ali Khamenei out as Supreme Leader?” prediction market contract before he was killed on Saturday.

Although a fiery death at the business end of a US or Israeli missile would certainly, in most people’s eyes, count as being “out,” Kalshi’s rules technically contained a death carve-out.

Specifically, the fine print specified that if Khamenei’s removal happened via death, the contract wouldn’t pay out.

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Traders were predictably furious. “Getting rugged on a 100% correct prediction because of a fine-print ‘death carveout’ is wild,” one user wrote on Kalshi’s Discord.

“What you’re doing is stealing,” wrote another.

Critics accused Kalshi of trying to have its cake and eat it too by platforming a contract in the first place that involved bets on human death, then hiding behind compliance language when reality hit. 

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It had the option all along to not list the market for trading, after all. It decided to list it and accept trades.

Using crypto to profit from death

Even though the market involved potential death, Kalshi promoted it on social media for days. Users wagered $54 million on it.

US Senator Chris Murphy called it “insane this is legal.”

Ex-SEC Chief of Staff Amanda Fischer told NPR that prediction markets are “promoting opportunities to bet on events that can only be seen as a proxy for war or assassination… this betting market shouldn’t exist in the first place” 

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Six Democratic senators had already urged the CFTC in late February to ban contracts tied to anyone’s death. Wagers on Khamenei’s killing made their letter prophetic.

On Polymarket, Kalshi’s less-regulated offshore competitor, the numbers were uglier.

Roughly half a billion dollars changed hands on contracts tied to when US forces would strike Iran which, again, has obvious ramifications on human life.

Crypto keeps building death markets

Sadly, crypto wagers on death are nothing new. Early concepts of cryptographic assassination markets have circulated since at least a 1995 essay by cypherpunk Jim Bell.

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In 2018, crypto prediction platform Augur launched with assassination markets appearing almost immediately. 

Read more: Lord Miles wants YouTubers to help settle Polymarket scandal

In September 2025, Polymarket hosted a multimillion-dollar market on whether YouTuber Lord Miles would survive a 40-day desert fast . Trading odds crashed when fears spread that he had actually died.

Hivemind progenitor Paul Sztorc repeated his multi-year call for a “fully peer-to-peer prediction market system that cannot be shut off by anyone under any circumstances.”

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More recently, in January 2026, an anonymous Polymarket trader made $400,000 on a suspiciously well-timed bet on Venezuelan leader Nicolás Maduro’s downfall.

In February, Israeli authorities indicted two people for using IDF classified information to bet on Polymarket during military conflict last June between Israel and Iran.

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

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BTC Hits $70K With Steady Flows as Bitcoin Holders Remain Calm in a Tense Climate

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

TLDR

  • Bitcoin moved near $70,000 while holders showed no panic during rising Middle East tensions.
  • Short-term holder loss transfers dropped to a 2- week low as selling pressure eased.
  • Realized losses fell to 3,700 BTC even as geopolitical risks increased across the region.
  • BTC derivatives showed reduced risk as Binance open interest declined by 25 %.
  • The leverage ratio reached a low weekly average that aligned with ongoing deleveraging.

Bitcoin traded near $70,000 on Monday as war fears grew across the Middle East, and the market held steady and pushed higher. Traders watched exchange activity closely because short-term flows shifted again. The latest chain data showed cooling loss-driven selling, and futures activity kept falling as open interest reset lower during the session.

Short-term Flows Shift as Loss Transfers Fall

Short-term holder loss transfers dropped to a two-week low, and this shift aligned with slowing exchange flows across major venues. Realized losses fell to 3,700 BTC on March 1 as tensions rose, and traders kept BTC above $63,000 as inflows stayed muted.

The reduction contrasted with early February, and that period saw 89,000 BTC sent at a loss within one day. Analysts said the current environment showed reduced stress and “zero panic,” and loss-driven inflows kept compressing into March.

This decline showed less pressure from recent buyers, and the market tracked whether losses would surge again. The steadier flows set a calmer tone, and traders watched if the pattern would hold under geopolitical pressure.

Bitcoin Holders Watch Liquidity Bands

BTC moved through $70,000 on the four-hour chart, and the price approached liquidity between $70,000 and $71,500. Traders said this area could turn into support, and they pointed to past supply reactions near $80,000.

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Analysts highlighted growing clusters near the range highs, and these pockets sat between $70,000 and $73,000. They said these areas often pull price when they grow, and the market kept scanning for reactions.

Spot flows supported the move, and Binance recorded $7.79 million in positive delta during the breakout. Coinbase added $1.16 million, and OKX logged $3.7 million, and this pattern pointed to steady spot demand.

The activity showed stronger bidding across venues, and the move came while leverage decreased again. Traders then turned to the $71,500 band, and they watched for a reaction if buyers held the zone.

Derivatives Reset as Leverage Drops for Bitcoin holders

Futures data showed a clear reduction in risk, and analysts tracked a 25% contraction in Binance open interest since the year began. The metric fell from 130,800 BTC to 97,680 BTC, and the reset aligned with calmer positioning.

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The estimated leverage ratio slipped to a 0.146 weekly average, and past cycles tied low readings with heavy deleveraging. This trend revealed a lighter market structure, and traders monitored the shift as BTC tested key monthly metrics.

BTC attempted to reclaim its Monthly RVWAP in the high-$68,000 zone, and trading above it placed the month’s average buyer in profit. Analysts said this move often changes positioning, and they watched to see if BTC could stabilize above the level.

The session ended with BTC near the $71,500 liquidity band, and the market focused on spot flows as the price tested the region.

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BTC’s jump to $69,000 likely the result of short-covering

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BTC's jump to $69,000 likely the result of short-covering

After dipping over the weekend as the U.S. began strikes against Iran, bitcoin shot higher on Monday, at one point nearing $70,000 before pulling back to the current $69,000.

While any rally in bitcoin is welcome by the bulls, today’s move comes after a relentless months-long slide that has halved the price and weighed on sentiment. One analyst suggests Monday’s quick gains carry the hallmarks of a positioning squeeze, with traders who had bet on further downside forced to unwind those trades as prices rose.

“This is clearly a flushing of shorts due to the confluence of the Iranian attacks causing a rebalancing across the whole capital stack with bitcoin having a tailwind from a reversal of spot bitcoin ETF outflows,” said Mark Connors, chief investment officer at Risk Dimensions. In other words, macro shocks triggered repositioning across markets, and bitcoin benefited as some investors rotated back into risk, and recent spot bitcoin ETF outflows slowed or reversed.

A short flush can create sharp, fast rallies. When traders who borrowed to bet on falling prices rush to close their positions, they must buy back the asset, adding fuel to the move. That dynamic can push prices higher than fundamentals alone would justify, at least in the short term.

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“This is not a signal of the march back to $100,000 and through the very important 75,000 resistance,” said a cautious Connors In his view, the rally does not yet mark a decisive break from the broader downtrend. Key resistance levels remain overhead, and without sustained spot demand, the bounce could stall as quickly as it began.

Market positioning data underscores his caution and shows how tightly wound the derivatives market has become.

Data from CoinGlass’ liquidation heat map shows a $218 million cluster of positions that will be liquidated if price tumbles to between $65,250 and $64,650, which was the base from which Mondays’ rally began.

This, coupled with open interest rising by 6% over the past 24 hours while price increased by 3.8%, suggests the move is backed by leverage rather than spot buying, leading a number of traders to take profits at the psychological $70,000 level of resistance.

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On the other hand, a break above $70,000 would trigger around $90 million worth of short liquidations — likely enough fuel to challenge February’s high of $72,000.

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Cardano price tests historic support hinting at reversal

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Cardano price tests historic 2022 support as oversold conditions hint at reversal - 1

Cardano price has returned to a major historical support zone near $0.28 as RSI plunges into extreme oversold territory.

Summary

  • $0.28 aligns with 2022 and 2023 historical support
  • RSI in extreme oversold conditions
  • Holding support opens bounce toward range midpoint

Cardano (ADA) is once again testing a long-term demand zone that previously acted as a structural bottom during the 2022 bear market. The same region later served as a foundation for the 2023 cycle low, reinforcing its significance as a high timeframe support area.

Cardano price key technical points

  • Major Support: $0.28 aligns with the historical 2022 and 2023 demand zone.
  • Oversold Signal: RSI in extreme oversold territory.
  • Range Structure: Price remains within a broader high timeframe trading range.
Cardano price tests historic 2022 support as oversold conditions hint at reversal - 1
ADAUSDT (1W) Chart, Source: TradingView

Cardano’s current price action reflects heightened selling pressure, but it is unfolding at a technically important location. The $0.28 region represents both the value area low and the broader range low within the current high timeframe structure. Historically, this level provided a strong base during the 2022 downturn and later marked the 2023 cycle bottom, establishing it as a critical liquidity zone.

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Momentum indicators further strengthen the case for a potential reversal. The Relative Strength Index (RSI) has entered extreme oversold territory, signaling that selling pressure may be approaching exhaustion. While oversold conditions alone do not guarantee an immediate rebound, they often precede periods of relief rallies, particularly when aligned with significant structural support.

From a market structure perspective, Cardano continues to trade within a larger consolidation range rather than a confirmed breakdown trend. As long as price remains above the $0.28 range support, the probability favors continuation within this established structure.

Markets frequently rotate between range extremes before deciding on longer-term direction, and the current setup mirrors previous historical rotations, even as Cardano price remains under pressure despite the Midnight Foundation unveiling major blue-chip companies as node operators.

If support holds and RSI begins to recover through a bullish crossover, the first upside target would likely be the range midpoint, followed by the upper boundary of the trading range. Previous cycles have demonstrated that once oversold momentum unwinds, Cardano can produce sharp relief rallies toward equilibrium zones.

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However, traders should remain cautious. A confirmed breakdown below the historical support would invalidate the bullish reversal thesis and expose deeper downside levels. For now, the technical evidence leans toward a potential bounce scenario, given the confluence of oversold momentum and long-standing demand.

Volume dynamics will be critical in determining the strength of any recovery. A rise in buying participation near $0.28 would confirm accumulation behavior, while continued weak demand could delay reversal attempts.

Overall, Cardano finds itself at a decisive inflection point. The combination of historical support and extreme oversold readings creates conditions favorable for a relief rally, but confirmation depends on whether buyers can defend the range low.

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What to expect in the coming price action

As long as Cardano holds above the $0.28 range support, the probability favors a short-term rebound toward the range midpoint and potentially the range high. A breakdown below this level would shift structure bearish and increase downside risk, but current oversold conditions suggest a bounce remains likely in the near term.

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David Miller Chosen to Head CFTC Enforcement While Crypto Role Increases

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

TLDR

  • The CFTC appointed former federal prosecutor David Miller to lead its enforcement division as its crypto oversight role expands.
  • Chair Michael Selig said Miller will focus on policing fraud, abuse, and manipulation while the agency increases staffing efforts.
  • Miller stated he is honored to join the CFTC during what he described as a major period of change for digital asset regulation.
  • Lawmakers continued advancing bills that could broaden CFTC authority over crypto markets and related platforms.
  • Recent reports raised concerns about enforcement staffing at both the CFTC and the SEC after reductions in crypto cases.

The Commodity Futures Trading Commission (CFTC) advanced its enforcement plans on Monday as Chair Michael Selig appointed David Miller to lead the division. The move came as the agency expanded its oversight of digital assets and prediction markets. The appointment followed rising questions about enforcement capacity across federal market regulators.

CFTC Enforcement Leadership Shift

The agency named Miller after he handled complex digital asset matters in both government and private practice. The CFTC said his background supports its effort to direct more resources toward market oversight.

Selig stated that Miller brings “decades of experience” that will guide work on fraud, abuse, and manipulation cases. He added that Miller’s approach will reflect a focus on policing markets rather than shaping policy.

Miller said he was “honored and thrilled” to join the agency during what he called a major moment. He also said he appreciated the trust placed in him by Selig.

Crypto Oversight and Agency Staffing

Lawmakers continued to work on bills that could expand CFTC jurisdiction over crypto markets. These proposals would broaden federal roles and create clearer oversight rules. The industry watched staffing levels closely as both the CFTC and Securities and Exchange Commission restructured their enforcement teams. Reports said the CFTC’s Chicago office recently operated without enforcement attorneys after several departures.

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Selig addressed those concerns and said the agency has enough resources to handle its caseload. He also said the CFTC will keep adding personnel to strengthen supervision.

At the SEC, Chair Paul Atkins faced questions about reduced enforcement activity. Lawmakers asked about the drop in digital asset cases and demanded clarity.

Enforcement Trends Across Federal Regulators

Cornerstone Research reported a 30% drop in SEC enforcement actions during 2025. Its data also showed a 60% decrease in crypto cases year over year. Atkins responded by saying the agency maintains a “robust enforcement effort” across its portfolio. He said the agency continues to follow existing rules.

Miller previously served at Greenberg Traurig and Morgan Lewis as a litigation partner. He focused on commodities, securities, digital assets, and national security. He also worked for nearly a decade as an assistant U.S. attorney in the Southern District of New York. The CFTC said this experience strengthens its enforcement program.

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Selig said Miller has a proven record of defending market participants from aggressive legal theories. He also said the appointment strengthens the division during rapid industry change. Miller will direct the agency’s enforcement priorities as regulators refine their approach to digital assets. His work begins as both federal regulators assess evolving market conditions.

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Iran Conflict and Economic Data: Events in Focus for 2-6 March

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Iran Conflict and Economic Data: Events in Focus for 2-6 March

Let’s discuss three upcoming events that may impact market activity across currencies, equities, and commodities.

✔️Washington and Israel struck Iran, the supreme leader of Iran Ayatollah Khamenei was killed. Iran retaliated, escalating tensions.

Oil jumped over 8%, global stocks fell, and so-called safe-haven assets rose. A Strait of Hormuz disruption could push oil sharply higher and increase recession risks (in our previous video, we outlined possible scenarios if US–Iran tensions escalate further.

✔️ The US Nonfarm Payrolls and Unemployment Rate will arrive on 6 March.

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January’s strong jobs data pushed rate-cut expectations further out and caused a mixed market reaction. This week’s report could drive sharp moves in major USD pairs and US stock indices.

✔️The ISM Manufacturing PMI and ISM Services PMI will be released on 2 March and 4 March, respectively.

Following the first expansion signal in US manufacturing activity in twelve months — and the strongest improvement since 2022 — the upcoming ISM Manufacturing PMI release may become an early-week catalyst for US dollar positioning.

January’s ISM Services PMI confirmed resilience in the dominant sector of the US economy, and another strong reading would reinforce expectations that Federal Reserve policy will remain restrictive for longer, underpinning the USD.

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Traders should stay alert — disciplined risk management will be key in the days ahead.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Northern Trust Launches Tokenized Treasury Money Market Fund Share Class

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BIS, BlackRock, RWA, RWA Tokenization

Northern Trust Asset Management has launched a tokenized share class of its NIF Treasury Instruments Portfolio, marking its entry into the digital assets market, according to the company. 

The structure uses distributed ledger technology to maintain a digital mirror of share ownership, while the underlying portfolio continues to invest in short-term US Treasurys.

According to Monday’s announcement, the shares will initially be offered through BNY’s LiquidityDirect platform, which operates on Goldman Sachs’ Digital Asset Platform. The fund itself does not use blockchain technology or invest in crypto assets. Instead, authorized intermediaries are expected to maintain a blockchain-based mirror of ownership records for clients.

The NIF Treasury Instruments Portfolio invests in a diversified pool of short-term US Treasury instruments and seeks to maintain a $1.00 per-share value, though it is not FDIC-insured and may lose value.

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