The Coldcard seed-generation failure has exposed about $116 million in Bitcoin to theft while renewing questions about how users verify the security of self-custody tools, according to TEXITcoin founder Bobby Gray.

Bobby Gray, founder of TEXITcoin, told crypto.news that Coldcard users suffered losses because they trusted the hardware wallet to generate secure seed phrases without independently checking the source of randomness.

“Coldcard sat on a broken seed generator for five years, and it still cost people $116 million,” Gray said.

“Some of these wallets were generating seeds with as little as 40 bits of entropy instead of the 128 they promised.”

Gray said the lower entropy turned recovery phrases designed to resist brute-force attacks into targets that determined attackers could search without gaining physical access to the devices.

Coldcard seed flaw weakened wallet security

Coldcard is a Bitcoin-only hardware wallet made by Canadian hardware manufacturer Coinkite. Hardware wallets keep private keys away from internet-connected computers and sign transactions within the device, reducing exposure to malware and online attacks.

Coldcard’s reported failure occurred before the private keys entered secure storage. According to a Coinkite security advisory, a firmware integration error caused affected devices to use a predictable software random-number generator instead of the intended hardware source while creating wallet seeds.

Firmware versions 4.0.1 through 4.1.9 on Coldcard Mk2 and Mk3 devices were affected. The first vulnerable release arrived in March 2021, leaving the error active for more than five years before Coinkite disclosed it on July 30.

Coinkite estimated that seeds created on affected Mk2 and Mk3 devices contained about 40 bits of effective entropy. Vulnerable Mk4, Mk5, and Q devices generated about 72 bits rather than the expected 128 bits, according to the advisory.

A correctly generated 128-bit seed provides an extremely large set of possible combinations. Reducing the effective randomness to 40 bits leaves about one trillion possibilities, a range that specialized computing systems can search when attackers have enough information about the wallet’s seed-generation process.

TRM Labs said the attackers could reconstruct affected private keys without opening, stealing, or modifying the hardware wallets. The blockchain intelligence firm attributed the error to a build configuration introduced with firmware version 4.0.1.

On-chain estimates cited by TRM Labs placed the preliminary loss at about 1,816 BTC, worth approximately $116 million, across more than 5,200 addresses. Four suspected waves began on July 30, though TRM warned that the total could change as investigators confirm victim reports and trace additional addresses.

Gray says self-custody itself did not fail

In an Aug. 6 analysis, Gray described the incident as a failure in the process used to create private keys rather than a compromise of Bitcoin or the physical security components inside Coldcard devices.

No attacker needed to steal a device, obtain its PIN, or install malicious firmware, according to Gray. Once attackers reconstructed a vulnerable seed, they could derive its associated private keys and sign transactions from another system.

“The people who bothered adding their own dice rolls for extra entropy walked away untouched, while the people who just trusted the device to handle it got wiped out,” Gray said.

Coinkite’s advisory supports the distinction involving independent randomness. Users who entered at least 50 fair, private, and independent dice rolls while creating their seed are not considered at risk from the random-number-generator flaw alone. Between 50 and 98 rolls added at least 128 bits of entropy, while 99 or more added about 256 bits, the company said.

Fewer than 50 rolls do not meet Coinkite’s stated exception. Users who cannot remember how many rolls they entered, whether the process was private, or which final seed words they retained were advised to migrate their funds.

Gray argued that the incident should not be treated as evidence that centralized custody is safer in every case. In his view, self-custody requires users to verify how their keys are created instead of relying only on the product’s listed security features.

“Blind trust is what failed here, and self-custody is taking the blame it doesn’t deserve. If you haven’t independently verified your entropy, you don’t actually know what you’re holding, no matter how many security features are stacked around it.”

His TEXITcoin post also separated the event from phishing, malicious firmware, and supply-chain attacks. Gray classified the firmware problem as a severe mistake by a wallet maker rather than evidence that Coinkite designed the product to steal customer funds.

Coldcard losses have changed custody decisions

User behavior has moved in a different direction from Gray’s recommendation. OKX reported record deposits after the incident, as some Bitcoin holders transferred assets from personal wallets to centralized platforms.

As previously reported by crypto.news, OKX Chief Compliance Officer Jonathan Brockmeier said the inflows represented the opposite of the behavior seen after FTX collapsed, when users withdrew assets from exchanges and moved them into self-custody.

Gray rejected the idea that leaving Bitcoin on an exchange resolves the problem. Centralized services control customer keys and can freeze withdrawals, suffer security breaches, or fail financially, he said.

“Running back to an exchange because a device let you down isn’t a solution either, since that’s just handing your risk, and your keys, to someone else to lose instead,” Gray said.

Blockchain investigators have not attributed the theft to one identified group. TRM said differences in transaction construction across the suspected waves could indicate several attackers, while most stolen Bitcoin had initially remained in consolidation addresses.

The firm detected limited laundering activity, including a 64.9 BTC deposit to Wasabi and 200 ETH sent through Tornado Cash on Aug. 4. TRM said the transaction pattern differed from the fast laundering methods often associated with organized state-backed hacking groups.

US investors face a different custody trade-off

For American investors who only want exposure to Bitcoin’s price, U.S.-listed spot Bitcoin exchange-traded funds remove the need to generate seeds, update wallet firmware, or maintain physical backups.

Bloomberg Intelligence analyst Eric Balchunas said the Coldcard losses strengthened the case for regulated spot Bitcoin ETFs. A report on ETF custody noted that products such as BlackRock’s iShares Bitcoin Trust ETF rely on institutional custodians rather than requiring shareholders to control private keys.

BlackRock’s SEC filing identifies Coinbase Custody as the main custodian for IBIT’s Bitcoin and names Anchorage Digital Bank as another custodian the trust may use. Shareholders own exchange-traded securities, however, and cannot withdraw the underlying Bitcoin to a personal wallet or use it for payments.

Institutional custody also transfers risk instead of removing it. IBIT’s filing lists hacking, employee misconduct, technical failures, and unauthorized transfers among possible sources of loss. The filing also says insurance shared by Coinbase may not cover every potential incident.

Coldcard users must replace vulnerable seeds

Coinkite has released fixed firmware for every affected model, including version 4.2.0 for Mk2 and Mk3 devices, version 5.6.0 for standard Mk4 and Mk5 devices, and version 1.5.0Q for the standard Coldcard Q.

Installing an update only corrects the generation of future seeds. Coinkite said firmware cannot add randomness to an existing recovery phrase because the weakness remains attached to the seed even if a user imports it into another wallet.

Affected users were instructed to install the correct firmware, generate a completely new seed, verify its fingerprint and receiving address, and send a small test transaction before moving the remaining balance. Coinkite advised users to retain the old backup until the transfer reaches the replacement wallet and receives network confirmation.

El Salvador marked five years since it made Bitcoin legal tender, but the legacy of the experiment is proving far more contested than the celebratory moment in 2021 suggested. President Nayib Bukele pitched the move as a fast track to financial inclusion, cheaper remittances, and more investment—yet new research and later policy changes indicate that everyday adoption never materialized on the scale promised.

According to Dr. Tobias Boos, a senior scientist at the University of Vienna who leads research into Bitcoin’s political economy in El Salvador, the project fell short when measured against Bukele’s stated goals. “There is little doubt that the project was a failure if we take seriously the reasons Bukele gave for its adoption,” Boos said, pointing to limited progress on foreign direct investment, banking access, and remittance use.

Key takeaways

• Research led by Dr. Tobias Boos finds “mass adoption by citizens did not occur,” with adopters more likely to be young, male, urban, and already banked.
• Despite Chivo’s launch and remittance-focused hopes, crypto wallets handled only a small share of remittance flows by 2024.
• An IMF program culminating in 2025 approvals pushed El Salvador to reduce state involvement: acceptance became voluntary and public-sector use of Bitcoin was limited.
• The most durable impact may have been symbolic—making nation-state Bitcoin adoption a real-world precedent—rather than transforming payments or financial inclusion domestically.

Promises of financial inclusion vs. who actually adopted

When Bukele announced the plan at Bitcoin 2021 in Miami on June 5, 2021, he framed adoption as a way to create jobs and deliver financial inclusion to people outside the formal economy. But five years on, evidence described in the research Boos co-authored suggests the adoption pattern did not match the inclusion narrative.

In a 2025 study, Boos and colleagues (Grigera and Schmid) reported that Salvadorans who adopted Bitcoin were disproportionately young, male, urban, and more highly educated—and importantly, “already banked.” Boos’ interpretation is blunt: “Mass adoption by citizens did not occur.”

The mismatch matters because El Salvador’s starting point was weak banking access. World Bank data cited in the reporting shows that in 2021, only 35.9% of people aged 15 and over held a bank account—one of the lowest levels in the region. In other words, if Bitcoin were to serve as a substitute for missing banking infrastructure, it would need to bridge gaps for people without accounts.

Yet the government’s Chivo wallet, while capable of transferring funds to bank accounts, did not remove the structural barriers preventing many unbanked Salvadorans from accessing the financial system in the first place. Boos and his colleagues describe this as the same core problem reappearing across the adoption story: even with incentives, the missing link was broader financial accessibility rather than the availability of a wallet app.

Remittances: where the “cheaper transfers” thesis didn’t stick

Bukele also sold Bitcoin adoption as a way to improve remittance economics. El Salvador’s economy is tightly linked to money sent from abroad: in 2024, remittances were reported to account for around 24% of GDP, with the United States providing 98% of the total. But the reporting highlights a key constraint—El Salvador has used the U.S. dollar for more than two decades—meaning the most obvious potential cost-saving from Bitcoin (bypassing currency conversion) was already largely neutralized.

That context helps explain why, even with a wave of early promotional activity, crypto wallets remained marginal in remittance flows. The cited research indicates that crypto accounted for barely 1% of remittances by 2024, down from a peak of about 1.7% in 2020–21.

Incentives also did not translate into durable usage. Chivo offered users $30 worth of Bitcoin for signing up, but an analysis described in the article by the National Bureau of Economic Research found that more than 60% of early Chivo users did not make another transaction after spending their free BTC. The reported pattern points to a “try it for the reward” adoption model rather than sustained payment behavior.

On the ground, Bitcoin-focused journalist Joe Nakamoto reported a similar disconnect. In a recent visit, Nakamoto claimed he tested Bitcoin acceptance at 21 shops in a San Salvador mall and found that only four accepted it, and just one did so smoothly. His characterization in the reporting is that living on Bitcoin is “borderline impossible” except in narrow, workaround-driven areas.

The IMF pivot: from legal tender to voluntary use

While public debates about Bitcoin adoption continued, international pressure eventually forced a policy recalibration. In December 2024, El Salvador agreed to a $1.4 billion financing arrangement with the International Monetary Fund, under which it would scale back its involvement in Bitcoin. The agreement was later approved in February 2025, and in January the government amended its Bitcoin law.

The changes described in the reporting included making acceptance voluntary, requiring taxes to be paid in U.S. dollars, and limiting public sector involvement in Bitcoin-related activities—effectively dismantling the most far-reaching parts of Bukele’s original approach. Put simply, Bitcoin could still be used, but the state would no longer compel businesses to accept it or embed it into the public financial system.

Boos says the outcome aligned with the IMF’s assessment. He described the initiative as “soft adoption” that never led to mass payments usage, noting in the reporting that he is not aware of tax payments made using Bitcoin and that supporting infrastructure largely remained unused. Separately, the IMF later found “no evidence” of a beneficial use case for the unbanked and characterized Bitcoin’s impact on financial inclusion as minimal.

For investors and builders watching adoption narratives, this shift is instructive: it shows that legal frameworks and state incentives alone are insufficient if day-to-day demand, payment rails, and integration into mainstream economic behavior do not follow.

What El Salvador did achieve: a precedent, not a universal payments system

Even if Bitcoin did not become everyday money across El Salvador, the experiment still delivered something unprecedented: it moved nation-state Bitcoin adoption from a theoretical concept into a real, live case study. Samson Mow, chief executive of Bitcoin infrastructure firm JAN3, framed the change as a shift in how governments think—turning the question from “whether a sovereign could hold Bitcoin” to “why it hadn’t.”

El Salvador also drew sustained attention from prominent figures in the Bitcoin ecosystem, effectively placing the country at the center of the movement’s public narrative. The reporting notes that Stacy Herbert, who later became a director of El Salvador’s National Bitcoin Office, exemplifies how deeply some parts of the Bitcoin community became intertwined with government structures.

At the same time, the article draws a distinction between what Bitcoin achieved for El Salvador and what El Salvador achieved for Bitcoin. Boos argues the symbolic significance was largely “for” the international Bitcoin community rather than evidence of economic success for Salvadorans. Nakamoto goes further, describing the overall strategy as closer to branding aimed at outsiders than an internally effective economic plan—“beautiful branding” directed at those with capital and passports.

There are also examples of localized, working ecosystems. Bitcoin Beach in El Zonte is cited as an early grassroots initiative that predates the national experiment and reportedly continues functioning even after acceptance became voluntary. The reporting similarly references individual stories of Salvadorans using Bitcoin in daily life, portraying the persistence of micro-economies even as national-scale goals faded.

Beyond legal tender, the Bukele government also promoted projects such as Volcano Bonds and Bitcoin City. However, the article states that repeated delays undermined their progress, and the IMF arrangement “kneecapped” those efforts—though it acknowledges that symbolic impact may still matter to how the episode is remembered globally.

The harder question: Bitcoin strategy under emergency politics

The experiment’s global meaning cannot be separated from the governance environment that made it possible. During Bukele’s time in office, power has been concentrated, and the state of emergency introduced in March 2022 to combat gang violence remains in place years later.

Human Rights Watch, according to the reporting, says the government has continued to remove checks on executive authority. The article also states that local and international human rights organizations have documented mass arbitrary detention and due process violations under the state of emergency.

At the same time, the reporting emphasizes that judging Bukele only through this lens may miss why he remains popular at home. It cites a sharp fall in the official homicide rate—from 53.1 per 100,000 during the year he took office to 1.3 per 100,000 in 2025—framing the crackdown as a visible public security transformation for many Salvadorans.

That tension feeds into the uncomfortable question for Bitcoiners: what does it mean when a philosophy about individual freedom is advanced through a government imposing policy at scale? Mow acknowledges the potential of emergency powers in the hands of a leader who shows restraint, while warning about how quickly those same mechanisms can be repurposed if leadership changes.

Ultimately, the five-year assessment presented in the reporting is split. Bitcoin gave Bukele global attention, and Bukele gave Bitcoin something it had not previously secured at that level: a nation-state willing to place the asset at the center of its economic strategy—even if the implementation did not deliver the promised outcomes for payments, remittances, or mass financial inclusion.

Going forward, readers should watch how El Salvador’s voluntary policy framework evolves—particularly whether Bitcoin usage remains confined to niche communities like Bitcoin Beach or finds more mainstream payment integration—while also tracking the ongoing human rights and institutional implications of emergency governance that shaped the experiment.

The United States and the United Kingdom have issued 10 recommendations for stablecoins, tokenized securities, and cross-border finance, although the proposals have not created enforceable rules.

The Transatlantic Taskforce for Markets of the Future published the recommendations on July 14, setting priorities for cooperation between two of the world’s largest financial centers without replacing either country’s regulatory process.

Established in September 2025 by U.S. Treasury Secretary Scott Bessent and UK Chancellor Rachel Reeves, the task force brought together officials from the Treasury departments, the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Bank of England, and the Financial Conduct Authority.

Five recommendations deal with digital assets. The remaining five address capital raising, foreign issuer requirements, consolidated market data, swap-trading supervision, and international accounting standards.

New Market Trading CEO Frank Hepworth told crypto.news that the cooperation responds to a basic conflict between global digital markets and national financial supervision. Crypto assets can move through phones and computers across borders, while governments still apply most financial rules through domestic institutions.

“The US and UK are doing this because they are two of the world’s leading financial markets, and both face the same problem: digital assets are accessible globally through any computer or phone, while financial regulation is still imposed nationally, largely through domestic financial institutions,” Hepworth said.

US-UK crypto cooperation targets tokenized markets

Under the first recommendation, the governments plan to establish a private-sector-led group for tokenized finance. The group would operate for one year and test cross-border transactions while sharing technical and regulatory practices with public authorities.

Regulators would also examine how their rules treat tokenized assets. According to the report, the SEC, CFTC, FCA, and Bank of England will consider common approaches to settlement finality, regulatory treatment, and market infrastructure.

One area under review is whether stablecoins and tokenized money-market funds could qualify as margin collateral at central counterparties. Any decision would depend on separate work by the relevant agencies because the task force cannot authorize new collateral or change existing market rules.

Tokenized securities have already entered active regulatory discussions in both countries. In July, the UK selected HSBC’s Orion platform for its first blockchain-based sovereign bond, with the digital gilt scheduled for issuance by early 2027 inside the Bank of England and FCA Digital Securities Sandbox.

U.S. regulators are examining similar questions involving ownership records and investor rights. The SEC delayed work on a tokenized-stock exemption in May after exchanges raised concerns about unaffiliated companies issuing blockchain representations of public shares, according to earlier crypto.news coverage.

Hepworth said suppressing digital-asset technology could leave either country behind jurisdictions that allow regulated development. In his assessment, the task force represents an effort to adapt financial oversight while preserving the competitive positions of London and New York.

“Both countries also recognize that simply trying to ban or suppress this technology risks putting them at a competitive disadvantage to jurisdictions that embrace it,” he said. “This task force is an attempt to work out how regulation can adapt to that reality.”

Stablecoin access depends on domestic implementation

Published alongside the recommendations, the UK-US Joint Statement on Stablecoins supports a route through which a stablecoin regulated in one country could eventually be offered or used in the other.

Officials said any arrangement should preserve financial stability, consumer protection, market integrity, and safeguards against illicit finance. The statement also supports one-to-one reserve backing and protection for holders if an issuer becomes insolvent.

No mutual-access system currently exists under the announcement. Regulators must decide how an overseas stablecoin issuer would qualify, which domestic requirements would still apply, and how authorities would divide supervisory duties.

Hepworth noted that the countries are coordinating on stablecoins, tokenized securities, and cross-border access so their regulatory systems can remain effective as the technology develops. He cautioned, however, that cooperation documents do not themselves change the legal position of issuers, exchanges, or investors.

“Importantly, none of the ten recommendations published in July creates binding rules by itself. They establish regulatory priorities and areas for cooperation, while the actual rules will still be made domestically.”

The absence of binding provisions means the recommendations do not grant licenses, establish passporting rights, or remove compliance duties in either jurisdiction. Companies seeking access to U.S. or UK customers must continue to follow the laws and authorization requirements that apply in each market.

U.S. rules remain unfinished under the GENIUS Act

For American issuers and investors, implementation depends partly on the GENIUS Act, which President Donald Trump signed in July 2025. The statute created a federal framework for payment stablecoins, including one-to-one reserve requirements, issuer restrictions, monthly disclosures, and federal or qualifying state supervision.

Treasury has proposed rules for state-level regulatory systems and separate requirements covering anti-money-laundering and sanctions compliance. Issuers with no more than $10 billion in outstanding tokens may use state supervision if the Treasury determines that the state framework is substantially similar to federal standards.

Federal agencies did not complete all required regulations by the law’s July 18, 2026, deadline. As reported in July, several rule packages remained unfinished, including customer identification and anti-money-laundering measures.

Missing the deadline did not automatically postpone the statute’s implementation. The GENIUS Act is scheduled to take effect by Jan. 18, 2027, unless final regulations produce an earlier effective date under its timetable.

The task force also asked the two countries to support a targeted review of the Basel Committee on Banking Supervision’s prudential standards for crypto assets. According to the report, U.S. and UK officials will seek standards that are technology-neutral, based on evidence, and consistent across financial centers.

UK stablecoin rules are moving on a separate timetable

British regulators are proceeding through a different framework. The FCA will oversee most UK stablecoin issuers and regulated crypto activities, while the Bank of England will supervise sterling stablecoins that HM Treasury recognizes as systemically important.

In June, the Bank dropped proposed individual holding caps and proposed a £40 billion issuance limit for each systemic stablecoin. Its framework would permit issuers to hold up to 70% of reserves in short-term government debt, with the remainder kept in non-interest-bearing deposits at the central bank.

The Bank is accepting comments on its draft code through Sept. 22 and intends to finalize the requirements by the end of 2026. Regulated systemic stablecoins are expected to begin operating under the framework in 2027.

Hepworth said onchain markets will keep developing while officials build the applicable rules. Regulators, he added, must balance international competition with the financial oversight governments have traditionally exercised through banks.

The FCA’s authorization window for firms entering the new UK crypto regime will run from Sept. 30, 2026, to Feb. 28, 2027. Approved rules will apply when the mandatory framework begins on Oct. 25, 2027.

Forecasts point to 0.1% month-on-month growth in the headline CPI for July, up from June’s –0.4% reading. The year-on-year figure is expected at 3.4%, down from 3.5%, and annual core CPI inflation is seen dropping to 2.5% from 2.6%.

According to ING, a softer-than-expected print could weaken the dollar, an outcome that could bode well for the crypto market.

In bitcoin’s case, traders are hoping the report will push the price out of its recent trading range of $62,000 to $66,000. However, the way BTC options are currently priced suggests low expectations for CPI-driven fireworks.

Markus Thielen, founder of 10x Research, said the market is pricing a post-CPI swing of just 1.3%, which is nothing out of the ordinary.

Data tracking website Laevitas made a similar observation: “7d ATM IV [implied volatility] has compressed to 29.1v on BTC and 41.2v on ETH even as a binary July print lands inside the weekly window, so the term structure is declining to price the event risk that sits directly on the tape,” Laevitas said on X.

The fact that expectations remain low could be just the setup for markets to be surprised into action by a potential big beat or miss in the inflation figures. Stay alert!

FlightAware, the real-time aviation tracking company, moved quickly to end its lawsuit against prediction markets platform Kalshi—less than a week after the case was filed and one day after a court ordered Kalshi to explain why a temporary restraining order should not be issued.

According to a Tuesday filing in the U.S. District Court for the Southern District of New York, FlightAware’s attorneys notified the court that they voluntarily dismissed the action against Kalshi. The original lawsuit, filed the day before, alleged Kalshi used FlightAware’s name and data to run markets tied to flight cancellations.

Key takeaways

• FlightAware voluntarily dismissed its case against Kalshi in the Southern District of New York shortly after Kalshi was ordered to respond on restraining-order grounds.
• Kalshi’s event contract language appears to have shifted from “FlightAware” to “Primary Source Agency,” including an added disclaimer meant to avoid implying affiliation.
• The dismissal does not remove the broader legal pressure on prediction market operators facing challenges from U.S. states and regulators.
• Federal-state jurisdiction fights remain central, with the CFTC citing “exclusive jurisdiction” positions in related matters involving Kalshi.

A rapid procedural reversal in federal court

In its Tuesday submission, FlightAware’s legal team stated that it had voluntarily dismissed the lawsuit against Kalshi. The notice was filed after Kalshi had been ordered by a judge to show cause as to why the court should not issue a temporary restraining order involving FlightAware’s trademark and data claims.

The timeline is notable for its speed: the dispute was initiated with FlightAware’s complaint alleging trademark infringement, breach of contract, harm to reputation, and unfair competition. Less than a day later, the case was withdrawn.

Although such abrupt turnarounds can sometimes indicate settlement discussions, neither FlightAware nor Kalshi had publicly commented on the litigation as of Wednesday, according to the reporting context provided in the source.

Contract language changed—from “FlightAware” to “Primary Source Agency”

The lawsuit’s core allegation centered on Kalshi’s use of FlightAware branding and information to structure event markets related to flight cancellations. In at least one public-facing event contract, however, the wording appears to have been altered.

At minimum, the language describing the entity responsible for verifying outcomes shifted from “FlightAware” to “Primary Source Agency.” That same contract also included a disclaimer indicating that the market listing does not “indicate an endorsement of this product or any affiliation” between FlightAware and Kalshi. The “Primary Source Agency” label was linked to FlightAware’s website, aligning the verification reference with FlightAware while avoiding direct brand positioning.

Cointelegraph reported that it reached out to the companies for comment but did not receive an immediate response, leaving the reason for FlightAware’s dismissal unclear. What is clear for market participants is that these labeling and attribution details are not just branding choices—they can directly affect legal exposure when they imply relationships between data providers and market operators.

Prediction market legal pressure continues beyond this dispute

FlightAware’s withdrawal from the case comes amid an ongoing wave of litigation and regulatory conflict targeting prediction markets in the U.S. As outlined in the source material, Kalshi and other prediction platforms such as Polymarket have faced legal action from multiple U.S. state gaming authorities and regulators over alleged unlicensed or illicit sports betting offered to residents.

These cases have been shaped by a key tension: whether prediction markets fall under federal oversight—particularly the U.S. Commodity Futures Trading Commission (CFTC)—or instead are primarily governed by state gaming and gambling laws.

In a separate matter involving New York, the CFTC invoked what it described as “emergency authority” to block state officials from seeking a temporary restraining order that would have prohibited Kalshi from offering event contracts nationwide. The move followed New York authorities filing suit in July, alleging that Kalshi was operating an unlicensed gambling platform through its contracts on sports and other events.

Federal vs. state jurisdiction remains the central battleground

The CFTC’s stance is tied to assertions made repeatedly by its chair, Michael Selig, that the agency has “exclusive jurisdiction” over prediction markets. In the New York fight, that position was used to counter state efforts to impose a nationwide restraining order.

The source also points to a Michigan case with similar themes. In June, a Michigan judge ordered Kalshi to stop offering sports betting contracts to residents until the civil case concluded. The CFTC—again under Selig—then ordered Kalshi not to comply with the state ruling, according to the referenced reporting. Kalshi’s leadership, including its head of enforcement and legal counsel as described in the source, characterized the situation as creating an “impossible position” between competing state and federal orders.

While FlightAware and Kalshi’s dispute over trademark and data has been dropped, the surrounding environment for prediction market operators has not eased. Instead, the legal focus appears to be shifting toward the broader regulatory framework—who has the authority to regulate these markets, and under what legal definitions.

For users and investors watching prediction markets, the next key question is whether the industry’s ongoing compliance approach—especially around data attribution and product affiliation language—will reduce friction in future disputes, or whether the bigger federal-state jurisdiction conflict will continue to dominate outcomes regardless of how individual contracts are labeled.

On April 14, Goldman registered the Goldman Sachs Bitcoin Premium Income ETF with the SEC, proposing a structurally similar covered-call product. Balchunas was blunt about what Wednesday’s deal means for that filing.

“Nowww I get why GS never launched the BTC covered call product they filed months ago,” Balchunas wrote. “Better to leapfrog BlackRock’s $BITA vs me too?”

One senior ETF analyst, who asked not to be named, said the deal reflects Goldman’s push to build out its ETF business broadly, noting that BTCI is one of almost 20 funds in the NEOS lineup. “If anything, it shows that bitcoin is just part of the financial world, alongside stocks, bonds, etc.” As of June 30, 2026, Goldman Sachs Asset Management, Innovator from Goldman Sachs Asset Management and NEOS manage more than $130 billion in ETF assets under supervision (AUS), according to the Wall Street bank’s statement.

BlackRock released its own bitcoin income ETF, BITA, on Nasdaq on June 16, about two months ahead of Goldmine’s filing. BITA targets a 15-25% annual yield and sells covered calls on 25-35% of its IBIT holdings. Its expense ratio is 0.65%.

BTCI charges 0.99% and is down 42.55% over the past year, with shares falling from a 52-week high of $65.87 to around $28.40, according to Bloomberg terminal data shared by Balchunas on X. According to the fund’s SEC prospectus, BTCI’s distributions may in part represent a return of capital rather than net investment income, a distinction income investors should weigh.

For the second time, TIME will publish a ranking of India’s Fastest-Growing Companies, in partnership with Statista, a leading international provider of market and consumer data and rankings. The list will recognize the country’s leading companies with strong revenue growth between the fiscal years 2023 and 2026.

As part of the research phase, TIME and Statista are now accepting data submissions. While submitting data ensures that eligible companies will be considered for inclusion, it does not guarantee a place on the final list. Additionally, the final ranking will not be limited to companies that submit data.

The Bank of England’s Digital Pound Lab is running a new experiment that tests whether stablecoins—and a notional digital British pound—could work together inside the same cross-border trade payment flow. The project is designed to show how payment and settlement could be connected to trade finance in a way that reduces the delays and cash-flow pressure that small and medium-sized businesses often face.

According to an announcement from the project participants, the trial involves NOBO Finance, Dun & Bradstreet and Polygon Labs. In the setup, an exporter receives an advance through a stablecoin-based “rail,” while a UK importer completes settlement using simulated digital pounds—without using real customers or real money.

Key takeaways

• The Digital Pound Lab experiment tests stablecoin rails alongside simulated digital pounds in a single cross-border trade settlement flow.
• NOBO Finance, Dun & Bradstreet and Polygon Labs are collaborating, with Polygon providing smart contract infrastructure.
• A second workstream focuses on generating reusable credit profiles for small businesses using transaction data and open-finance inputs.
• The Bank of England has not committed to issuing a digital pound, and lab tests are not intended as signals of future policy.

How the trade finance pilot is meant to work

The core concept targets a structural problem in international trade: payment timing. When exporters ship goods before receiving full payment, they may have to wait days to be paid, tying up working capital. That delay can make trade finance harder to access—particularly for smaller firms that may lack established lines of credit.

In the lab’s proposed flow, the exporter receives an advance via a stablecoin pathway, while the importer performs settlement through simulated digital pounds. The pairing is intended to demonstrate how stablecoin-based payment mechanics could coexist with a central-bank-style settlement layer, at least in a controlled testing environment.

The experiment is also designed to be realistic in terms of participants’ roles: it is built around trade finance and settlement processes rather than a generic token transfer scenario. That distinction matters because trade finance depends on paperwork, counterparty assessment and timing—factors that can be difficult to model in simple demonstrations.

Building blocks beyond payments: credit profiles for SMEs

The project does not stop at moving value. It includes a separate workstream intended to improve how small businesses are assessed for credit, by creating reusable credit profiles.

As described in the announcement, that credit-profile effort combines transaction data, open-finance information and Dun & Bradstreet’s commercial risk data. Polygon Labs is contributing smart contract infrastructure for the overall system, which suggests the test may explore whether on-chain logic can help standardize or reuse parts of the credit assessment process rather than rebuilding them from scratch for every transaction.

For investors and builders, the value of this component is that trade finance bottlenecks are often caused by more than settlement latency. Information asymmetry and rigid underwriting cycles can restrict financing even when payment rails are upgraded. By aiming at “reusable” profiles, the project appears to target a way to shorten the time between data availability and a credit decision—though the outcomes of that part of the work are not yet detailed.

Why regulators and central banks are watching stablecoins and tokenized payments

The Bank of England’s experiment lands in the middle of broader regulatory and infrastructure work in the UK. The central bank and other regulators are preparing for stablecoins and tokenized assets, while also modernizing the plumbing behind traditional payment settlement.

Earlier this year, the Bank of England published draft rules for sterling-denominated stablecoins it considers systemic to the UK financial system. According to the central bank’s proposal referenced in the report, issuers could hold up to 70% of their reserves in interest-bearing government debt, and the framework introduces a temporary issuance cap of 40 billion pounds (about $52.8 billion) for each systemic stablecoin.

The policy timeline included in the article points to potential finalization by the end of 2026, ahead of a planned 2027 rollout. Stablecoins deemed “systemic” would fall under the Bank of England’s regulatory regime, while non-systemic stablecoins would remain under the Financial Conduct Authority.

That split between systemic and non-systemic tokens is an important practical detail for market participants. It implies that not every stablecoin would be treated the same way, and that compliance requirements could vary depending on how widely a token is used and how much it matters to financial stability. For developers, it also suggests that designs and reserve structures may need to be aligned with which regulatory lane a token is likely to occupy.

The lab’s trade test is also tied to the UK’s wider push to upgrade settlement speed and flexibility. In May, the Bank of England proposed moving its RTGS and CHAPS systems toward near-24/7 operation, including weekend and extended daily hours—an effort framed as support for cross-border payments and evolving settlement models that could incorporate tokenization.

In July, the central bank also approved HSBC’s Orion platform to operate in the UK’s Digital Securities Sandbox. The article notes that Orion is expected to support digital bond issuance, including the country’s planned Digital Gilt Instrument. While that is separate from stablecoin rules, it reinforces the theme that UK authorities are testing tokenized approaches across multiple asset types, not only payments.

What the Digital Pound Lab trial does—and does not—indicate

Even as the experiment explores stablecoin rails and simulated digital pound settlement, the Bank of England is explicit that the Digital Pound Lab uses no real customers or money and that it has not committed to issuing a digital pound.

The central bank also cautions that participant-designed experiments in the lab should not be interpreted as indications of future policy or as endorsements of the companies or products involved. In practice, that means readers should treat the pilot as proof-of-concept work: useful for identifying technical and process challenges, but not a guarantee of a specific eventual product roadmap.

What to watch next is whether the project can demonstrate measurable improvements—such as reduced settlement delays, more efficient financing workflows, or faster credit assessment cycles—within its controlled environment. Since the announcement does not provide results or performance metrics yet, the most immediate signal will come from any follow-on reporting from the lab on what worked, what failed, and which regulatory assumptions were necessary for the trial design.