Anchorage Digital, a federally chartered crypto bank and stablecoin infrastructure provider, has submitted a public comment letter supporting the US Treasury Department’s proposed Anti-Money Laundering (AML) and sanctions framework for the GENIUS Act, arguing that the rules largely strike the right balance between compliance and innovation.

In a letter published Wednesday, Anchorage said the proposed framework appropriately places AML obligations on regulated stablecoin issuers while urging Treasury to clarify secondary-market sanctions liability, enterprise-wide AML programs and correspondent account requirements.

Specifically, Anchorage argued that issuers should not face strict liability for failing to independently identify sanctioned users who transact on secondary markets through their smart contracts.

“A final rule that is clear and workable gives regulated institutions the certainty they need to build, and strengthens U.S. leadership in the next generation of payments and settlement infrastructure,” Anchorage said.

Source: Kevin Wysocki

The comments address Treasury rules proposed in April that would classify payment stablecoin issuers as financial institutions under the Bank Secrecy Act, subjecting them to AML, customer due diligence and suspicious activity reporting requirements.

The proposal, jointly issued by the Financial Crimes Enforcement Network (FinCEN) and Treasury’s Office of Foreign Assets Control (OFAC), would align stablecoin issuers with existing US anti-money laundering and sanctions compliance standards while imposing enhanced monitoring and recordkeeping obligations.

Related: Solana Institute CEO says CLARITY Act must shield open-source developers

Industry groups push for broader sanctions carveouts

Support for the proposed rulemaking has not been uniform across the crypto industry.

The lobbying arms of crypto derivatives exchange Hyperliquid and venture capital firm Paradigm recently submitted their own comment letter seeking greater clarity on secondary-market obligations, echoing Anchorage’s concerns but taking a more critical view of the proposal overall.

Source: Stefan Schropp

The groups argued that the current framework could impose sanctions obligations on issuers even when they lack a direct relationship with or visibility into users transacting on secondary markets.

“OFAC sweeps secondary market activity into the issuer’s compliance perimeter, treating smart contract interactions as an ongoing “provision of services” that carries sanctions liability regardless of whether the issuer has any relationship with, or visibility into, the transacting parties,” they said.

Related: SEC’s Peirce argues publishing DeFi code is protected speech

Meta has agreed to lease a 168-megawatt AI data center in India from Reliance Industries. The facility will rise in Jamnagar, and Reliance will deliver it within two years.

The deal adds new AI infrastructure for Meta while extending its partnership with Mukesh Ambani’s group.

Meta expands AI capacity in Jamnagar

According to Meta’s release, Reliance Industries will build the AI-enabled data center for the US technology company. The facility will carry 168 megawatts of capacity and include an option to scale. Reliance operates businesses across petrochemicals, textiles, media, telecom, and digital services. Its new agreement with Meta adds data centers to a long-running technology partnership between both companies.

“This world-class facility in Jamnagar will help us scale our AI infrastructure globally,” Meta CEO Mark Zuckerberg said. He said the project also deepens Meta’s long-term investment in India’s economy. Reliance Chairman Mukesh Ambani described Meta’s latest investment as a “transformative moment for India’s digital infrastructure.” His company will build the site and lease it to Meta after completion.

The two companies already have deep business links in India. In 2020, Meta invested $5.7 billion in Jio Platforms, Reliance’s telecom and digital services unit. Last year, Meta and Reliance expanded their work through a joint venture. The partnership made Meta’s open-source AI models available to Indian enterprises and developers.

India draws data center capital

Global hyperscalers have increased data center spending in India as AI infrastructure demand grows. The country has attracted $400 billion into its AI ecosystem over the last year. Most of that money has gone toward data centers and energy systems, according to the provided industry figures. Large AI systems need high-capacity sites and steady power supply.

Nomura said in a June 2 report that India’s data center industry ranks among the fastest-growing globally. The brokerage also said India remains cost-efficient compared with developed Asia Pacific and Western markets. India’s data center capacity could rise to 7 gigawatts by 2030, according to Nomura. The report linked that growth to cost advantages and rising hyperscaler demand.

The Indian government also introduced a 20-year tax exemption earlier this year. The policy covers hyperscalers using Indian data centers to serve clients outside the country. The tax rule adds another incentive for companies building AI infrastructure in India. Meta’s Reliance deal comes during that expansion of policy and private-sector investment.

Renewable energy deals support Meta operations

Meta is also working with Indian clean energy firms CleanMax and Fourth Partner Energy. The company said those partnerships cover nearly 1 gigawatt of renewable energy. The projects will operate across northern and southern Indian states. They will supply clean power to Meta’s expanding infrastructure footprint in the country.

Meta said the India energy investments align with its global clean power target. The Facebook parent wants to match all operations with 100% clean and renewable energy. The Jamnagar data center agreement adds to Meta’s existing India commitments. 

The deal links AI infrastructure, renewable power, and Reliance’s industrial base in one project. Reliance will deliver the data center within two years, according to Meta’s release. The facility also includes an option to scale after the first phase.

Raydium has pledged to fully reimburse losses after an exploit drained approximately $1.3 million from five legacy liquidity pools built on Solana.

According to blockchain security firm PeckShield and on-chain investigator Specter, the attack targeted retired automated market maker infrastructure that is no longer used by active Raydium pools. The protocol said current users and active liquidity pools were not affected by the incident.

Federal regulators came out with their first proposed rules on how to oversee prediction markets on Wednesday. 

The Commodity Futures Trading Commission, which has taken the lead as the federal regulator over the markets, will seek to develop a framework to determine if contracts are contrary to the public interest and illegal.

Those questions surround contracts that relate to terrorism, assassinations, war, gaming or illegal conduct under state and or federal law, based on the Commodity Exchange Act. The commission did not outright ban any type of event contract based on the category of the trade, like those related to sports or elections.

The proposed rule focuses heavily on how the commission will determine if a contract crosses too much into the realm of terrorism, war or assassinations, topics that domestically-regulated exchanges have avoided offering contracts on.

The CFTC rules left some grey area around gaming, which has been the source of much controversy on the question of sports-related event contracts, though it detailed some sports-related contracts that the commission will not allow.

In a release, the commission acknowledged the rules proposed on Wednesday were thin, and noted that further rulemaking regarding prediction markets may come in the future.

After Wednesday’s announcement, the proposed rule will now face a 45-day public comment period.

“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” said CFTC Chairman Michael Selig, who was appointed by President Donald Trump, in a statement. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”

Selig in a post on X added that the commission will “balance market integrity with responsible innovation” as it continues future rulemaking processes.

The rule establishes a process to determine how contracts will be prohibited. The commission will first determine if the contract is in fact based on an event happening. Then, it will consider if that event falls within the categories defined in the Commodity Exchange Act, and then conduct a public interest analysis to decide if it should be prohibited or not.

Prediction markets have exploded in popularity over the past year, creating a scramble to figure out how to regulate them.

States have challenged the platforms, believing their sports-related offerings amount to betting, something that is under their jurisdiction. However, the CFTC argues all contracts — no matter their topic — are swaps, which gives the agency exclusive authority to regulate them.

At the same time, bipartisan members of Congress have expressed concerns about the platforms and potential risks for insider trading, though no official legislation on the markets has been considered. 

On the question of sports, the rule was explicit that some contracts will not be allowed.

“Within gaming, the Commission aims to permit contracts settled on aggregate sports outcomes with objective data and integrity infrastructure, while prohibiting pure‑chance games and high‑risk sports‑adjacent designs (e.g., injury, officiating‑only, discrete actions, altercations, pre‑collegiate events),” according the rule.

The commission noted gaming, though, could be interpreted very broadly. It settled with one that defines it as something done for recreation or to entertain, is governed by rules and is based on measurable outcomes determined by skilled activity during the activity.

Using the new definition, the CFTC concludes contracts related to elections were not gaming, as they aren’t for recreation nor entertainment.

Bitcoin has erased its post-CPI gains after renewed threats from U.S. President Donald Trump against Iran pushed traders back into risk-off positioning and sent the crypto asset below $62,000.

According to market data, Bitcoin (BTC) briefly climbed above $62,400 on June 10 after U.S. inflation data came in line with expectations, easing concerns that price pressures were accelerating worse than anticipated.

The inflation report showed the U.S. Consumer Price Index rose 0.5% month-over-month in May, matching economists’ expectations, while the annual inflation rate came in at 4.2%, matching forecasts. The data eased concerns that inflation was reaccelerating beyond control and briefly strengthened expectations that the Federal Reserve could keep interest rates unchanged rather than hiking them later this year.

The move proved short-lived as geopolitical developments quickly took center stage, dragging BTC back toward the $60,000 area and leaving it down on the day.

Fresh pressure emerged after Trump issued a series of posts on Truth Social criticizing Iran and signaling that military action could intensify. In one post, Trump said Iran had taken too long to negotiate and would now “have to pay the price.” Later, he escalated his rhetoric further, telling reporters that “we’re going to be attacking them very hard,” fueling concerns that the conflict could expand in the coming days.

Oil markets also reacted to the developments. According to market data, crude oil rose 2% to around $90 per barrel as traders assessed the growing risk of supply disruptions across the Middle East.

Geopolitical risks overshadow inflation relief

Although the latest Consumer Price Index report initially supported risk assets, traders shifted their focus toward the deteriorating situation in the Gulf region.

According to reports cited by CNN, flashes of light observed near a U.S. military facility in Bahrain sparked fresh attention after Iran threatened retaliation against American interests in the region. The threats followed what Iranian officials described as U.S. “self-defense strikes” conducted after the downing of an American military helicopter.

Additional reports indicated that Iran launched attacks against Bahrain, Jordan, and Kuwait, further raising concerns about a broader regional conflict. Market participants have increasingly linked the possibility of prolonged disruptions in energy markets to higher inflation risks, a development that could complicate expectations for monetary policy and weigh on speculative assets such as cryptocurrencies.

Earlier military exchanges involving Israel and Iran had already contributed to weakness across digital assets, and the latest escalation added another source of uncertainty for traders.

On-chain and derivatives data highlight key Bitcoin levels

Beyond the geopolitical backdrop, recent on-chain data suggests Bitcoin has entered a period historically associated with major market stress.

As previously reported by crypto.news, K33 Research found that more than 50% of Bitcoin’s circulating supply is now held at an unrealized loss after the cryptocurrency briefly fell below $60,000 earlier this week.

According to K33 head of research Vetle Lunde, similar readings appeared near major bear-market lows in 2011, 2018, and 2022, although he noted that the indicator does not guarantee an immediate bottom.

Technical indicators continue to show weakness. On the weekly chart, Bitcoin remains below a bearish Supertrend indicator near $83,500 and has broken beneath a long-term trendline that previously acted as support. Weekly stochastic RSI has also turned lower, indicating that downside momentum remains intact.

Meanwhile, CoinGlass liquidation data points to important short-term levels. The largest concentration of leveraged positions sits near $64,000, creating a potential upside liquidity target if Bitcoin rebounds.

On the downside, notable liquidation clusters remain concentrated around the $60,000 to $60,500 zone, an area traders continue to watch closely as geopolitical headlines drive market sentiment.

Hence, if Bitcoin maintains support above $60,000, the next upside target could be the heavily populated liquidation zone around $64,000. Conversely, a breakdown below $60,000 may open the door to a move toward $55,000 and potentially the $52,400 support level highlighted by the weekly chart. 

Justin Sun-owned HTX revealed in its most recent proof-of-reserves, dated June 1, that it’s moved $1.3 billion worth of its reserves to a new category that it refers to as “ThirdParty.”

This has affected multiple important assets for the exchange, including bitcoin (BTC), ether (ETH), USDC, Usual Stablecoin (U), and Tether (USDT).

These balances have apparently been moved to a new custodian, as the HTX website now notes, “The assets in the Custodial Wallets are maintained by third-party custodians.”

In order to verify these quantities, we’re told to “please directly contact the third-party custodians.”

Unfortunately, HTX hasn’t publicly disclosed who those custodians are.

Protos reached out to HTX for clarification on who or what ThirdParty is, but HTX has yet to provide an explanation.

Bitcoin on HTX

Currently, the HTX proof-of-reserves claims that HTX has 20,922.77 BTC on the exchange.

Of these, only 8,691.6, or 41.5%, are native BTC on the Bitcoin blockchain.

Far larger than that are the 10,422.9, or 49.8%, which are tokenized BTC issued on the Sun-founded TRON blockchain.

The United States is entering a broader debate over AI-driven deception in political advertising as the midterm cycle intensifies. A growing constellation of state laws, a cautious federal stance, and high-profile campaign examples are shaping how campaigns may use or be constrained by AI-generated content in the near term.

Industry observers and watchdogs say the moment highlights a fundamental tension: AI can expand reach and persuasion for campaigns, but it also risks undermining trust if audiences cannot readily verify authenticity. Several developments this year illuminate where the policy terrain stands and where it might move next.

Key takeaways

• State-level patchwork: Roughly 28 states have disclosure requirements for political ads, with many penalties civil in nature; Minnesota’s 2023 law also contemplates criminal penalties for certain deepfake disclosures as elections approach.
• High-profile Minnesota case: An AI-generated ad targeting a Minnesota political race raised questions about deepfake legality and political norms, triggering responses from lawmakers on both sides of the aisle.
• Federal guardrails are cautious: The Federal Elections Commission emphasizes disclaimers and bans fraudulent misrepresentation, but has not launched a comprehensive AI rulemaking; broader federal legislation has repeatedly stalled.
• Legislative momentum and pushback: A bipartisan draft bill would preempt state AI regulations, drawing pushback from civil liberties groups that warn about overreach and the need for safeguards.

A patchwork of state rules governs AI in political ads

Across the United States, regulation of AI in political messaging has largely fallen to state governments. While about a quarter of states implement clear disclosure requirements for AI-generated content, most rules carry civil penalties rather than criminal consequences, and enforcement varies widely. Minnesota sits at the intersection of evolving policy and high-profile test cases.

In Minnesota, a campaign ad tied to the Senate primary drew scrutiny for its use of AI-generated imagery that appeared to resemble Lt. Gov. Penny Flanagan. Flanagan herself referenced the spot on BlueSky, noting that voters might soon see a TV ad “starring something that… kind of looks like me.” The episode underscored how AI can blur lines between genuine endorsements and deceptive representations.

The law in Minnesota already has a recent history of addressing AI deception. A 2023 measure, introduced by lawmakers concerned about manipulated content, approved language that criminalizes certain uses of deepfakes within 90 days of an election when the creator knows the content is a deepfake or intends to influence an election. Critics say the law’s structure makes enforcement highly fact-specific, and whether a given ad crosses the line depends on context and intent.

Observers note that while the incident occurred after the Democratic-Farm-Labor (DFL) Party secured a nomination, the legal questions are not easily resolved by a single ruling. The broader state environment includes a notable chorus of concern: 40 DFL state legislators signed a statement condemning AI-generated deepfakes in political advertising, arguing that the technology undermines trust in elections.

Minnesota case highlights tensions between policy and campaigning

The North Star Dawn PAC, which supported a candidate aligned against Flanagan, issued the AI-generated ad that sparked the dispute. Its content, which depicted a figure resembling Flanagan with a symbolic payoff image, drew immediate pushback from Flanagan and her allies, who described the approach as deceptive and inappropriate for public discourse. A leading Minnesota lawmaker summarized the sentiment by saying the use of AI deepfakes “is unacceptable” regardless of political affiliation.

The episode fed into a broader debate about the pace at which campaigns adapt to AI tools. Critics argue that even where laws exist, the ethical and practical implications of AI in political advertising merit careful consideration beyond compliance. Campaign consultants and advertising executives have urged a measured approach, acknowledging both the persuasive potential of AI and the risk to voter trust.

In parallel, observers like DSPolitical’s Mark Jablonowski noted that most campaigns, across parties, would prefer to set standards that protect voters and uphold integrity, even as exceptions may occur. The Minnesota case thus serves as a testbed for how laws may be interpreted in dynamic media environments where AI content can be produced quickly and disseminated broadly.

Federal regulators and lawmakers wrestle with AI in elections

On the federal front, the landscape remains cautious and inconsistent. The Federal Elections Commission (FEC) maintains that election advertising must include clear and conspicuous disclosures for content distributed by a candidate’s committee, and it reiterates that fraudulent misrepresentation is prohibited. While the FEC has discussed AI-specific questions in various contexts, it has not undertaken a comprehensive rulemaking to govern AI in political ads.

Public advocacy and consumer groups have pressed for more formal guidance. In 2023, Public Citizen petitioned the FEC to initiate rulemaking to address AI in campaign materials, but the commission opted not to begin a formal process at that time, arguing that existing fraud provisions already cover deceptive content regardless of the technology used.

Legislative efforts at the federal level have faced a slow trajectory. The REAL Political Advertisements Act—intended to establish more explicit AI-related rules—failed to pass in Congress. The broader political environment has historically shown limited appetite for sweeping AI regulation, even as concerns about safety, accuracy, and accountability mount.

Nevertheless, lawmakers continue to explore options. In June, a bipartisan draft bill proposed by Rep. Lori Trahan and Rep. Jay Obernolte would preempt state laws aimed at regulating AI model development, raising questions about how to balance innovation, consumer protection, and electoral integrity. Civil liberties groups, including the ACLU, argue that preemption could hinder essential safeguards—advocating instead for a framework that preserves state authority to address local harms while ensuring privacy, non-discrimination, and AI safety.

A spokesperson for the ACLU framed the concern clearly: preemption could broaden the potential for AI-enabled harms if states lose tools to police transparency and safety measures. ACLU policy experts emphasize that states must retain authority to protect residents from abuses, hold tech companies accountable, and ensure AI is safe and trustworthy. In the broader debate, the absence of a robust, unified federal standard leaves states to chart their own paths, while federal agencies look for practical guardrails that can be implemented without stifling innovation.

As policymakers weigh these issues, observers will watch for the outcomes of ongoing enforcement and potential new rules at the state level, along with any further federal proposals. The Minnesota episode and related debates illustrate both the urgency of addressing AI-driven deception in elections and the complexity of aligning legal frameworks with rapidly evolving technologies.

What readers should watch next is how states respond to ongoing incidents and whether federal regulators move beyond general antifraud provisions to craft concrete guidelines for AI-generated political content. The balance between safeguarding electoral integrity and enabling technological innovation will determine the trajectory of AI in political advertising through the 2026 cycle and beyond.