Clearstream has expanded its institutional crypto custody service by adding six more digital assets.

Clearstream, the post-trade services provider owned by Deutsche Börse Group, said it now accepts Ripple-linked XRP, Cardano, Solana, Litecoin, Stellar, and Avalanche in its crypto custody offering. These assets join Bitcoin and Ether, which were already supported.

The move gives institutional clients a wider list of crypto assets inside Clearstream’s custody system. The firm said the expansion responds to growing demand for MiCA-compliant crypto assets in institutional finance.

Clearstream is one of Europe’s largest settlement and custody firms. Its parent, Deutsche Börse Group, operates across trading, clearing, settlement, and market infrastructure.

Crypto Finance remains sub-custodian

Clearstream said the service continues to use Crypto Finance, another Deutsche Börse Group company, as sub-custodian. Crypto Finance holds a MiCAR license, which lets it provide regulated crypto services across Europe.

The structure allows Clearstream clients to access crypto custody through existing accounts with Clearstream Banking S.A. in Luxembourg. It also lets institutions use familiar market infrastructure instead of setting up direct relationships with separate crypto service providers.

When the service was first announced, Clearstream said it would support Bitcoin and Ether before considering more assets based on client demand. As previously reported by crypto.news, the original plan gave about 2,500 institutional clients access to crypto custody and settlement from April 2025.

MiCA shapes institutional demand

The timing comes as Europe’s crypto market adjusts to the Markets in Crypto-Assets framework. MiCA created a single rulebook for crypto-asset service providers, including custody, exchange, transfer, and stablecoin services.

Meanwhile, ESMA’s register expanded after the July 1 deadline, with more firms gaining authorization to serve clients across the European Union. That shift has made licensing a key part of institutional crypto access.

Clearstream’s expansion fits that market. Banks, brokers, asset managers, and trading firms need custody providers that can meet regulatory, settlement, reporting, and operational needs.

The new token list also shows that institutional access is moving beyond only Bitcoin and Ether. XRP, Solana, Cardano, Litecoin, Stellar, and Avalanche each have large public markets and established user bases.

Deutsche Börse widens digital asset rails

Deutsche Börse Group has been building several digital asset services across its market infrastructure. Clearstream’s custody expansion adds another piece to that broader strategy.

Moreover,Deutsche Börse partnered with Circle to bring USDC and EURC into its trading and custody network under MiCA. The plan includes trading through 3DX and custody through Clearstream.

The group’s approach centers on regulated access rather than direct retail crypto services. Clearstream serves institutional clients that often need asset safety, settlement support, and clear legal structures before handling digital assets.

Key Highlights

• Real-world asset tokenization on XRPL exploded from $150M to $4B within twelve months
• Institutional investors pushed XRP spot ETFs to $1.49B in net inflows across eight weeks
• Ripple obtained comprehensive MiCA CASP authorization in Luxembourg, enabling operations throughout 27 EEA nations
• Weekly new wallet creation jumped from 18,100 to 26,000, marking the strongest growth since March
• XRP currently trades near $1.13 with derivatives open interest standing at $2.38B

Multiple catalysts are converging to drive renewed interest in XRP. According to information released by Evernorth, a digital asset treasury company backed by Ripple, the ecosystem is experiencing simultaneous expansion across tokenized real-world assets, exchange-traded fund capital flows, and on-chain user engagement.

The value of tokenized real-world assets operating on the XRP Ledger has skyrocketed from approximately $150 million twelve months ago to over $4 billion currently. More than 500 distinct products now operate on the network. Leading the charge are JMWH and the Ondo Short-Term Government Bond Fund, which collectively account for nearly $2.5 billion in market value.

In a landmark transaction, JPMorgan, Ripple, Mastercard, and Ondo Finance successfully executed a cross-border tokenized treasury settlement using the XRP Ledger. The entire transaction settled in roughly four seconds.

Market analyst Celal Kucuker (@CelalKucuker) shared his perspective on XRP’s immediate price trajectory, stating that “$XRP could reach $1.50 before the end of this month,” describing a 40% rally within 20 days as “absolutely possible.” His analysis emerged alongside strengthening on-chain metrics and derivatives market indicators.

Institutional Capital Continues Flowing Into XRP ETFs

XRP spot exchange-traded funds have maintained an unbroken streak of positive net inflows for eight consecutive weeks, accumulating a combined total of $1.49 billion. Current assets under management have reached approximately $1.05 billion, representing roughly 1.47% of XRP’s overall market capitalization.

Bitwise commands the largest position among XRP ETF providers with $330.84 million in net assets, trailed by Canary at $265.30 million and Franklin at $261.68 million. Daily trading volume across all XRP exchange-traded funds hit $14.48 million in the most recent session.

Evernorth emphasized that the sustained ETF inflow pattern indicates a meaningful transition toward institutional market participation, creating a bridge between conventional financial markets and digital asset ecosystems.

Ripple Secures Full MiCA Regulatory Clearance Across Europe

Ripple has been granted a Crypto-Asset Service Provider license by Luxembourg’s CSSF under the European Union’s Markets in Crypto-Assets framework. This certification builds upon preliminary MiCA approval obtained in June and represents the completion of Ripple’s comprehensive regulatory authorization process under EU legislation.

The licensing arrangement enables Ripple to passport regulated cryptocurrency services throughout all 27 European Economic Area member countries. Cassie Craddock, Ripple’s Managing Director for the UK and Europe, confirmed the company stands fully prepared to scale operations under the MiCA regulatory structure.

Ripple anticipates the dual regulatory approvals will accelerate market adoption of XRP-powered payment solutions and its RLUSD stablecoin throughout European markets.

Weekly XRP wallet creation surged from 18,100 to 26,000, representing the strongest weekly performance since March. XRP futures open interest climbed to $2.38 billion, with CME futures open interest increasing 3.21% in recent trading hours.

At the time of publication, XRP was changing hands at $1.13, trading within a 24-hour band of $1.11 to $1.16, while trading volume increased by nearly 50%.

Key Highlights

• ETH surged approximately 10% and momentarily reclaimed $1,800 following a positive shift in Net Taker Volume on June 28
• Open interest remained unchanged throughout the price increase, indicating the rally lacks leverage-driven speculation
• A critical resistance zone exists at the 50-day EMA near $1,806
• US-based ETH spot ETFs recorded net inflows for three consecutive trading sessions
• Vitalik Buterin presented “Lean Ethereum,” an extensive protocol transformation projected to reduce ERC20 transaction costs by more than tenfold

Ethereum has appreciated roughly 10% during the previous seven days, momentarily reaching the $1,800 level for the first time in several weeks. This upward movement followed the ETH Net Taker Volume indicator turning positive on June 28, demonstrating that purchasing activity was dominating perpetual futures markets. Following this shift, ETH has registered gains approaching 14%.

The most notable characteristic of this price advance is that open interest has remained essentially unchanged. This indicates that market participants are not increasing positions using leverage. The Estimated Leverage Ratio has similarly shown no significant increase following its June contraction. When price movements occur without corresponding leverage expansion, they generally demonstrate greater sustainability due to reduced exposure to cascading liquidation events.

The ETH Coinbase Premium Index, measuring buying pressure from US markets, continues to register in negative territory. However, it has recovered from the extreme depths observed in early July, indicating a gradual return of US-based purchasing activity.

US spot ETH exchange-traded funds have registered three consecutive sessions of net capital inflows, based on SoSoValue tracking. While modest, this represents a consistent indication of growing institutional participation.

Technical Barrier at $1,806

ETH is currently encountering a significant technical obstacle. The 50-day Exponential Moving Average is positioned at $1,806, coinciding with a horizontal resistance barrier at the identical price point. The RSI currently reads 57, suggesting positive momentum without reaching overbought territory. The Stochastic Oscillator approaches 86, indicating potential short-term overextension.

Should ETH break through $1,806, the subsequent price objectives include $1,909 followed by the 100-day EMA positioned at $1,970. Beyond that level, $2,018 and $2,108 represent additional resistance zones. To the downside, initial support appears at $1,741, with secondary support at $1,713 where the 20-day EMA resides.

Crypto analyst Daan Crypto Trades commented on the market dynamics, observing that ETH has successfully closed both weekly and daily candles back within the $1,750–$2,400 trading range. He indicated that a breakout above the local peak at $1,850 would represent a shift in market structure and demonstrate underlying strength. He noted this level would serve as his signal to begin targeting the upper boundary of the range.

Vitalik Buterin Introduces “Lean Ethereum” Blueprint

Regarding protocol development, Ethereum creator Vitalik Buterin has presented an extensive protocol transformation called “Lean Ethereum.” He characterized it as the third significant iteration of Ethereum, rivaling the Merge in scope and impact.

The implementation timeline spans three to four years and encompasses verification mechanisms, consensus protocols, privacy features, quantum resistance, and client infrastructure. Buterin indicated that verification will transition toward recursive STARKs. Consensus modifications target achieving one or two-round finality.

State modifications represent the most transformative component. Buterin projected that a potential 2030 configuration could feature Ethereum maintaining 2 TB of existing dynamic state alongside 100 TB of redesigned state architecture. This new architecture would optimize ERC20 tokens and NFTs. A proposed ERC20 restructuring utilizing UTXO-based storage could decrease transaction fees by over 10 times.

ETH is presently exchanging at $1,780.

Key Highlights

• Kraken is pursuing comprehensive banking authorization in Europe, with Lithuania identified as the target jurisdiction
• Success would make Kraken the sole cryptocurrency exchange holding a European banking license
• The strategy mirrors the approach taken by Revolut, which secured licensing from Lithuania’s banking regulator in 2018
• The exchange currently operates with MiCA credentials via Ireland and holds a MiFID license through Cyprus
• In early 2026, Kraken Financial achieved a milestone by becoming the first cryptocurrency company to connect with the Federal Reserve’s payment systems

Kraken, a leading global cryptocurrency exchange, is actively pursuing full banking authorization within Europe. According to sources with knowledge of the matter, the platform has set its sights on Lithuania as the preferred location for this regulatory milestone.

When approached for comment, Kraken representatives declined to provide details. The Bank of Lithuania confirmed that all licensing procedures for financial institutions remain confidential under current regulations.

Should the application succeed, Kraken would break new ground as the inaugural crypto exchange to secure comprehensive banking authorization in Europe. This designation would enable the platform to provide services including checking accounts, consumer credit products, and enhanced payment capabilities throughout the European Economic Area.

The regulatory strategy Kraken is pursuing follows an established precedent. Revolut, the digital banking platform, successfully obtained specialized banking credentials from Lithuanian regulators in 2018. That authorization enabled Revolut to broaden its financial service offerings across the EEA. Lithuania has also granted banking or specialized banking licenses to institutions such as Mano Bank, PayRay, and EMBank.

European Regulatory Framework Already Established

Kraken maintains MiCA authorization issued through Ireland’s Central Bank. Additionally, the exchange operates under a MiFID license granted by Cypriot authorities. These regulatory frameworks enable the platform to deliver compliant services to customers throughout the European Union.

MiCA regulations became enforceable EU-wide on July 1, 2026. Kraken has leveraged its existing authorizations to establish itself as a compliant operator for European customers under the updated regulatory environment.

Securing banking authorization would represent a significant advancement. It would enable Kraken to integrate cryptocurrency operations more seamlessly with conventional financial infrastructure, encompassing payment processing, asset custody, and institutional-grade services.

Constructing a Worldwide Regulatory Infrastructure

The European banking initiative represents one component of a broader licensing approach by Payward, Kraken’s corporate parent.

In March 2026, Kraken Financial achieved a significant first by obtaining access to the Federal Reserve’s fundamental payment systems. This development granted its US banking division direct connectivity to Fedwire for specific operational functions.

In May 2026, Payward obtained VARA authorization in the United Arab Emirates, incorporating another regulated jurisdiction into its operational framework.

Kraken co-CEO Arjun Sethi addressed attendees at Money 2020 Europe and detailed the company’s strategic vision. He indicated that the organization’s ten-year roadmap involves securing regulatory licenses across all major regions, either through acquisition of established entities or building operations from the ground up.

Kraken is additionally preparing for a public listing in the United States, creating additional incentive to establish a robust regulatory compliance record across key international markets.

The Lithuanian banking license, if obtained, would constitute one of the most significant achievements in this regulatory expansion. It would provide Kraken with direct access to traditional European banking infrastructure and position the exchange ahead of competitors regarding regulatory breadth.

Neither an application timeline nor anticipated approval date has been publicly disclosed.

StarkWare CEO Eli Ben-Sasson has reignited a long-running Bitcoin debate by arguing that the network’s fixed 21 million coin cap “doesn’t make sense” and should be replaced with a steady 4% annual issuance model. His position challenges a foundational pillar of Bitcoin’s monetary narrative: that a hard supply limit protects the asset from monetary debasement and preserves purchasing power over time.

In a post on X Tuesday, Ben-Sasson said the cap becomes less meaningful as time passes because private keys are lost, eventually leaving holders unable to access their coins. He linked that concern to the idea that, as the timeline approaches infinity, the usable supply trends toward zero—an argument that directly contrasts with the traditional “digital gold” framing of Bitcoin’s capped issuance. Source: Eli Ben-Sasson on X

Key takeaways

• Ben-Sasson argues Bitcoin’s 21 million cap is undermined over long time horizons by lost private keys.
• He suggested replacing the fixed cap with an issuance rate of about 4% per year, while still maintaining a form of long-term scarcity.
• Ledger has previously estimated that millions of Bitcoin may already be permanently lost, feeding into the “lost keys” argument.
• Critics on X say Bitcoin’s divisibility and fixed supply mechanics still address “not enough to go around,” and that changing the cap would make Bitcoin more like other cryptocurrencies.
• A potential workaround discussed in the Zcash ecosystem—burning with periodic reissuance—highlights how miner economics could be addressed without removing a hard cap, but it would still require broad Bitcoin consensus.

Why Ben-Sasson thinks the cap will fail over time

Ben-Sasson’s core claim is not simply that Bitcoin supply will be inadequate, but that the economic effect of a cap is eroded if a growing share of coins become inaccessible. He pointed to the long-run reality that private keys can be lost, making coins effectively unrecoverable.

To anchor that idea in publicly available estimates, the proposal also echoes figures cited by Ledger. In November, Ledger estimated that up to 4 million Bitcoin have been burned or permanently lost. Ledger estimate (via Ledger Academy)

Ben-Sasson said he still supports a hard upper bound on supply. But rather than relying on a one-time fixed limit, he argued that a consistent 4% annual issuance rate better matches real-world population growth—an analogy meant to address whether Bitcoin’s supply schedule remains economically aligned as adoption expands.

Bitcoin maximalists push back: scarcity, divisibility, and “lost keys”

Ben-Sasson’s proposal met quick and pointed criticism from the Bitcoin community on X. One user challenged the premise that Bitcoin would run out “to go around,” citing Bitcoin’s divisibility into 2.1 quadrillion satoshis (the smallest base unit). Source: X user response

Ben-Sasson replied that satoshis are not a permanent solution if private keys continue to be lost. In his view, even though Bitcoin is divisible, the accessible balance still trends toward zero over time as keys go missing. Source: Ben-Sasson follow-up on X

Other opponents framed the debate around identity: lifting the fixed cap, they argued, would move Bitcoin toward the behavior of other cryptocurrencies that issue supply through inflation. Ben-Sasson countered that Bitcoin would retain scarcity as long as the inflation rate stayed fixed. Source: X user response

The clash reflects a deeper asymmetry in how people interpret Bitcoin’s supply mechanics. For many Bitcoiners, lost keys can be viewed as a feature rather than a flaw: if coins are permanently inaccessible, they effectively reduce circulating supply and reinforce supply-demand dynamics. A prominent example is Michael Saylor, who has said he plans to burn his Bitcoin private keys after his death as a “pro-rata contribution” to other holders—an act intended to make other coins scarcer by reducing the amount of reachable supply.

Looking for a middle path: Zcash’s approach to cap sustainability

As the debate intensified, Zcash founder Bryce “Zooko” Wilcox suggested Bitcoin developers look at a proposal being discussed in the Zcash ecosystem. Zcash also has a fixed supply cap set at 21 million ZEC, and Wilcox argued that Bitcoin could study how Zcash addresses miner incentives without removing its hard limit. Source: Zooko on X

The proposal Wilcox referenced is the “Network Sustainability Mechanism.” Its design aims to keep ZEC’s 21 million cap intact by allowing users to burn tokens, which are then reissued gradually as block rewards over a four-year period. The intent is to relieve pressure on miner incentives without changing the hard supply cap.

While the concept is attractive in theory—seeking to balance network security incentives with a capped supply—Bitcoin would face a different practical environment. Implementing a protocol-level mechanism would require agreement across Bitcoin’s decentralized ecosystem, including developers, miners, and node operators. That coordination challenge is a major reason Bitcoin’s core monetary rules have historically been difficult to change even when a proposal is technically feasible.

What this debate means for Bitcoin’s future trajectory

Ben-Sasson’s argument is likely to keep circulating precisely because it targets a common point of tension: the difference between theoretical supply and economically usable supply over very long time horizons. The discussion also highlights that “hard cap” supporters and critics may not be speaking about the same problem. One side focuses on monetary predictability and the protection against debasement; the other side emphasizes that lost keys reduce the practical share of supply and may eventually distort the cap’s economic assumptions.

For investors and builders, the more immediate takeaway may not be whether a cap change happens, but what kinds of proposals gain traction around the margins of Bitcoin’s monetary design. A cap-preserving mechanism inspired by other networks would still require broad consent, yet it signals a potential direction for future debate: adjusting incentives and usability while trying to preserve the properties Bitcoin is known for.

As this topic continues to trend, watch for whether any proposal gains concrete supporters beyond social commentary—especially ideas that address miner and security incentives without directly abandoning the cap narrative that underpins Bitcoin’s cultural and market identity.

Gemini has launched commission-free stock trading for customers across most U.S. states, adding thousands of exchange-listed securities to its app as it expands beyond cryptocurrency services.

According to Gemini’s announcement on Tuesday, eligible customers can now buy and sell thousands of U.S. exchange-listed stocks with 0% commissions directly through the Gemini app, although the service is not yet available in Alabama, Arkansas, Illinois, Massachusetts, Texas, Puerto Rico, Washington, D.C., or Guam. 

As part of the rollout, Nasdaq has become the exchange’s official provider of real-time market data, while Apex Clearing Corporation will handle custody and trade clearing.

Gemini adds stocks to its growing financial platform

“We have over a decade of experience in building financial platforms. We started with crypto and are expanding to stocks so that customers can manage their entire financial lives right from the Gemini app,” Cameron Winklevoss, Gemini’s co-founder and president, said.

The launch extends Gemini’s strategy of building what it describes as an all-in-one financial platform. Before introducing stock trading, the company had already expanded into prediction markets, derivatives, artificial intelligence tools, staking, custody services and credit cards as it looked to reduce its reliance on spot crypto trading.

Recent regulatory approvals have also supported that expansion. Gemini secured a Commodity Futures Trading Commission license for its Olympus subsidiary to operate as a Derivatives Clearing Organization in April, adding to its existing Designated Contract Market license. 

According to the company, those approvals strengthen its ability to support crypto spot markets, derivatives and prediction products under regulated infrastructure.

Gemini also said it has updated its Financial Industry Regulatory Authority broker-dealer registration to operate as an introducing broker. The updated registration allows the company to introduce customer orders in National Market System securities, while Apex executes, clears, and settles those trades.

“Crypto was just the beginning. Our goal is to bring many financial products, from crypto to equities to derivatives, under one regulated platform,” Tyler Winklevoss, Gemini’s co-founder and chief executive officer, said.

Zero-commission stock trading has already become common across the brokerage industry following the growth of firms such as Robinhood. Companies offering commission-free trading often generate revenue through other services, including payment for order flow, interest earned on customer cash balances, margin lending, premium subscriptions or data licensing, although Gemini has not disclosed how its stock trading business will be monetized.

Crypto exchanges continue adding traditional financial products

Gemini’s latest launch comes as several crypto platforms continue expanding into traditional financial markets. In June, Coinbase introduced an SEC-registered AI investment advisor, announced plans for stock options, expanded prediction markets, and outlined tokenized stock offerings backed one-for-one by underlying shares.

Outside the exchange sector, social media platform X has also been building financial services into its platform. In April, the social media company introduced smart cashtags for users in the United States and Canada, while its Canadian partnership with Wealthsimple enabled stock and cryptocurrency trading directly through the app as part of Elon Musk’s long-term “everything app” plans.

StarkWare CEO Eli Ben-Sasson has revived debate over Bitcoin’s fixed supply after suggesting annual issuance.

In a Tuesday post on X, Ben-Sasson said Bitcoin’s 21 million supply cap “doesn’t make sense” because users lose private keys over time. He argued that lost keys reduce the amount of usable Bitcoin and that, over a long enough period, more coins will become unreachable.

Ben-Sasson proposed replacing the fixed cap with a hard issuance rule of up to 4% per year. He said the figure roughly matches global population growth, while still keeping Bitcoin scarce under a known monetary rule.

Lost keys drive the argument

Bitcoin does not have a password reset system. When a holder loses a private key, the coins remain on-chain but cannot be spent. That is why lost Bitcoin can reduce the supply available to buyers and sellers.

Ledger estimated that 2.3 million to 3.7 million BTC are permanently lost, while some reports place the figure near 4 million BTC. Ben-Sasson used this trend to argue that a fixed cap could make Bitcoin less useful over very long periods.

His view runs against a core Bitcoin belief. Many Bitcoin supporters see lost coins as part of the asset’s scarcity, not a problem to fix. The old Bitcoin view is that lost coins act like a “donation” to other holders because the remaining supply becomes harder to buy.

Bitcoiners reject 4% inflation

The proposal drew fast pushback from Bitcoin users on X. Critics said Bitcoin’s 21 million limit is one of its main features and that changing it would make BTC look more like other crypto assets.

Some users also pointed to Bitcoin’s divisibility. Bitcoin can be split into 2.1 quadrillion satoshis, giving users small enough units for payments even if whole BTC becomes harder to access.

Ben-Sasson pushed back, saying those satoshis would also trend toward zero over time if private keys keep getting lost. He said Bitcoin could still remain scarce if the inflation rate stayed fixed and predictable.

The debate links back to comments from Strategy executive chairman Michael Saylor. Saylor spoke about burning Bitcoin private keys as a “pro rata contribution” to other holders, though the report said he did not directly promise to do so himself.

Zcash model enters the debate

Zcash founder Bryce “Zooko” Wilcox suggested another path. He pointed to Zcash’s proposed Network Sustainability Mechanism, which would let users burn ZEC and gradually reissue those coins as future rewards without raising the 21 million cap.

That model tries to help miner incentives while keeping the fixed supply rule. It differs from Ben-Sasson’s proposal because it does not create a higher lifetime limit.

Any change to Bitcoin’s cap would face a high bar. Developers can propose code changes, but node operators, miners, exchanges, wallets, and users would need broad agreement before the network accepts them.

As previously reported by crypto.news, StarkWare has already worked on ways to bring scaling tools to Bitcoin without forking Starknet or launching a new Bitcoin token. This new debate moves from scaling into monetary policy, where Bitcoin users have shown little interest in changing the current supply rule.

Secret Network, a privacy-focused layer-1 blockchain known for running encrypted smart contracts, has proposed relocating from its long-time Cosmos environment to Ethereum’s Arbitrum layer-2. The move, announced Tuesday by the project team, is framed as a response to what it calls increasing security and liquidity risks on the current stack—risks the team says have been intensified by rapid progress in AI-assisted code analysis.

The proposal is expected to require a governance vote. If approved, Secret Network plans a one-time snapshot of SCRT balances on Sept. 1 to enable the issuance of a new ERC-20 SCRT token contract on Arbitrum.

Key takeaways

• Secret Network says “old code” on Cosmos is becoming harder to keep safe, arguing AI is reducing the cost of finding and exploiting vulnerabilities.
• Arbitrum is positioned as the destination due to deeper liquidity and stronger developer and infrastructure support.
• A June bridge exploit that resulted in $4.7 million lost in bridged assets did not affect Secret’s native SCRT token, but the team cites it as evidence of growing cross-chain risk.
• Secret’s Cosmos TVL is reported at about $1.3 million, while Arbitrum’s total value secured is cited at $17.4 billion (L2Beat).
• SCRT holders reacted negatively to the announcement, with CoinGecko data showing a 24% drop over 24 hours to $0.041.

Why Secret Network wants out of Cosmos

In a forum post, the Secret team said the “environment has changed” since the project launched privacy-preserving smart contracts on Cosmos in 2020. The team’s central rationale is security: it argues that vulnerabilities in older, “stale” code are becoming easier and cheaper to analyze, and that AI tools lower the barrier for attackers.

“The security risk is the part we take most seriously,” the team wrote, adding that with AI, the cost of attacking outdated code is falling “across the board.”

The team tied this concern to recent incidents, pointing to an Axelar-Secret IBC bridge exploit that it says spotlighted the danger of aging or under-maintained code. According to the forum post, the release of increasingly capable AI models—such as Anthropic’s “Claude Mythos 5,” referenced in earlier reporting by Cointelegraph—raises the likelihood that attackers can more quickly discover weaknesses and turn edge cases into working exploits.

“Attacks that used to take deep manual effort are getting cheaper as models get better at reading contracts, tracing assumptions, and turning a forgotten edge case into a working exploit.”

Cross-chain stress: the $4.7M bridge incident and what it implies

Secret Network’s proposal follows a bridge exploit reported earlier this year. In June, an exploit involving Secret’s bridge resulted in the loss of $4.7 million in bridged assets, though the team said it did not impact the native SCRT token.

While the exploit did not directly compromise SCRT itself, the team’s broader message is that cross-chain plumbing—often built on components that may not receive rapid upgrades—can become an outsized risk as the threat landscape changes. The proposal effectively treats that bridge incident as part of a pattern: if the cost to find and exploit weaknesses continues to fall, the practical burden of keeping all components secure becomes harder over time.

Earlier coverage from Cointelegraph described the “infinite mint” bug behind the $4.7 million loss, emphasizing how bridge logic can be fragile when assumptions fail. Secret’s latest move suggests the project believes switching to a different execution and ecosystem environment could help reduce some of those risks.

Arbitrum as a liquidity and tooling upgrade

Beyond security, Secret also argued that Cosmos has weakened as a growth hub. In its Arbitrum pitch, the team described Arbitrum as offering “deep liquidity, tooling, wallet and exchange support, and thousands of builders composing with one another.” It also stated that “liquidity has thinned” on Cosmos while developers have “drifted to other ecosystems.”

The team warned that Cosmos tooling stability is “shakier than it used to be,” and said several projects that previously anchored the Cosmos ecosystem have migrated elsewhere.

In practical terms, this shift matters for Secret Network because privacy-focused applications often rely on consistent liquidity, reliable developer tooling, and accessible integrations. A thinner ecosystem can translate into weaker DeFi participation, fewer composability pathways, and more friction for users—especially when projects depend on bridging, exchanges, wallets, and dApp integrations to reach liquidity.

What the numbers say—and how the market reacted

Secret’s proposal arrives amid a wider migration trend from Cosmos to Ethereum-based execution environments. The forum post cited declining Cosmos DeFi depth alongside rising Ethereum layer-2 scale.

According to the figures referenced in the announcement, the total value locked across the Cosmos ecosystem is around $2 billion, down 88% from its peak during the 2021 bull market. By comparison, Arbitrum is cited as the leading layer-2 by total value secured at $17.4 billion, based on L2Beat data. DefiLlama figures also placed Secret’s Cosmos TVL at about $1.3 million.

Market reaction has been sharply negative for SCRT. CoinGecko data referenced in the update shows the token down roughly 24% over the past 24 hours to around $0.041, representing a drop of more than 99% from its 2021 peak.

The broader context is that Secret is not alone in leaving Cosmos. In February, NilChain—a privacy-focused chain built with the Cosmos SDK—announced its move to Ethereum. Sei Network completed a full transition away from Cosmos in June by closing its native Cosmos transaction layer and operating on Ethereum. Noble, a stablecoin blockchain, was also reported earlier as having announced its migration from Cosmos to Ethereum in January.

For observers, this matters because it suggests a structural reallocation of development effort and liquidity toward EVM and large layer-2 environments—even when projects originally benefited from Cosmos’s modular design.

How the migration would work if governance approves

Secret Network’s plan includes a governance step and a technical token migration path. The team said it will conduct a one-time snapshot of SCRT balances on Sept. 1. The snapshot will then be used to issue a new ERC-20 SCRT contract on Arbitrum.

This design choice is notable because it signals the project intends to maintain a continuity mechanism for existing holders rather than treating the transition as a completely separate token. Still, the details of the migration—such as timing relative to the governance vote, how bridging or redemption would be handled during the transition window, and how ecosystem integrations will migrate—remain contingent on the governance outcome.

With that in mind, the next items to watch are the governance vote itself and any follow-on proposals that spell out the operational timeline, liquidity migration plans, and security controls for the Arbitrum deployment. The team’s argument centers on AI-driven risk and aging code assumptions—readers will want to see how the new architecture and maintenance practices address those concerns in practice.