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.

Australian crypto exchange Swyftx says it will be seeking opportunities in the crypto payments space after securing a license from Australia’s market regulator. 

Swyftx said on Wednesday that it received its Australian Financial Services License (AFSL), joining the likes of Coinbase, BTC Markets and Crypto.com. The license allows it to offer derivative products, such as crypto options or futures, to retail customers, as well as non-cash payment facility authorization, setting up the fintech to offer payment services to business and retail clients. It does not hold an AFSL to offer spot crypto. 

“Swyftx won’t be a pure crypto spot exchange in future,” Swyftx interim co-CEO Andrea Yuen told Cointelegraph. “In particular, we see a lot of opportunity in the payments space following local changes to credit card surcharging.”

From Oct. 1, Australian businesses will be banned from adding surcharges to Visa and Mastercard debit and credit card payments, which could prompt businesses to look for cheaper payment rails as they are set to absorb the cost. Swyftx is looking to pitch crypto and stablecoins as an alternative.

“Crypto payments and stablecoins offer an opportunity for merchants to reduce the transaction costs they might have to bear in future,” added Yuen.

Meanwhile, Swyftx said it is also looking to expand its presence overseas. The company serves clients in New Zealand and the US, and had previously eyed expanding to the UK, filing an application with the Financial Conduct Authority in March 2022. 

“Looking ahead, we want to use a well-regulated Australian market as a base to expand our presence overseas,” said Yuen.

AFSL requirements take effect in 2027

Crypto companies with an AFSL need to meet the same compliance duties as other finance companies. Crypto exchanges previously only needed to have anti-money laundering and know-your-customer policies in place, but legislation passed in April requires most crypto firms to hold an AFSL from April 9, 2027.

“It’s an enormous responsibility to be a regulated financial service,” said Yuen.

Only a small number of crypto exchanges have so far obtained AFSLs, including Coinbase, BTC Markets, Crypto.com and KuCoin.

It comes as the Australian Securities and Investments Commission recently extended the grace period for crypto firms to apply for an AFSL to Sept. 30. ASIC said it has received around 30 license applications from crypto businesses since October last year. 

Related: Australia’s crypto travel rule is coming into effect: Here’s what’s changing

Australian crypto ownership rises

A survey from Australian crypto exchange Independent Reserve suggested that 33% of Australians now own cryptocurrency, up from 31% in 2025. 

“Younger Australians are confronting an economic reality where traditional wealth-building paths, particularly home ownership, feel increasingly out of reach,” Independent Reserve CEO Adrian Przelozny said. 

“As a result, many are exploring alternative assets that have historically delivered stronger returns than traditional portfolios, and cryptocurrency has naturally become an option.” 

Bitcoin remains the dominant digital asset, which was held by 71% of survey respondents. 

Magazine: Has Bitcoin bottomed for this cycle? Analysts say ‘not yet’

The debate over whether Bitcoin’s fixed supply cap should be lifted has resurfaced after StarkWare CEO Eli Ben-Sasson suggested Tuesday that it should replaced with a 4% annual issuance rate.

In a post to X on Tuesday, Ben-Sasson said the current 21 million cap “doesn’t make sense” because private keys are lost over time and “as time goes to infinity, all keys will be lost.”

Crypto wallet hardware provider Ledger estimated in November that up to 4 million Bitcoin had been burned or permanently lost. Ben-Sasson said he still supports a hard upper bound on Bitcoin’s supply, and that a 4% annual inflation rate roughly tracks the growth of the human population.

Bitcoin’s fixed cap has long been one of its core selling points, underpinning the “digital gold” narrative and drawing on Austrian economics, where a fixed money supply protects against monetary debasement and, in theory, preserves purchasing power over time. Many Bitcoiners have argued that changing the cap would undo the very thing that makes Bitcoin unique. 

Source: Eli Ben-Sasson

Bitcoiners have also said the loss of private keys improves Bitcoin’s supply-demand dynamics because one can’t sell what one doesn’t have access to. One of the biggest advocates of this feature is Strategy executive chairman Michael Saylor, who plans to burn his Bitcoin private keys upon his death as a “pro-rata contribution” to other Bitcoin holders, making their coins scarcer in the process.

Bitcoiners bark at 4% Bitcoin inflation proposal 

Ben-Sasson’s post was met with heavy criticism.

One X user argued that Bitcoin is divisible into 2.1 quadrillion base units, called satoshis, in an effort to counter Ben-Sasson’s claim that there won’t be enough Bitcoin “to go around.”

However, Ben-Sasson argued that those 2.1 quadrillion units would also trend toward zero over time because of lost keys. 

Other opponents argued that lifting Bitcoin’s fixed cap would make it like other cryptocurrencies. However, Ben-Sasson said Bitcoin would retain its scarcity, provided that the inflation rate remained fixed.

Related: Has Bitcoin bottomed for this cycle? Analysts say ‘not yet’

The answer could be in Zcash’s proposed fix

The founder of Zcash, Bryce “Zooko” Wilcox, recommended that Bitcoin developers follow a proposal currently being considered in the Zcash ecosystem, since the privacy-focused network also relies on miners to secure the network and has a fixed supply cap of 21 million Zcash (ZEC).

The “Network Sustainability Mechanism” proposal seeks to keep ZEC’s fixed cap intact but lets users burn the token, which is gradually reissued as block rewards over a four-year period to ease pressure on miner incentives without lifting the hard limit.

However, Bitcoin developers, miners and node operators would need to reach consensus for such a change to occur, given the network’s decentralized governance model, which makes it challenging to implement protocol-level changes.

Features: Does ‘Paper Bitcoin’ mean there’s an unlimited supply of BTC? 

Strike has launched a Bitcoin-backed loan product built to remove margin calls and price-based liquidations.

Jack Mallers, Strike’s founder and chief executive, said the new product protects borrowers from forced selling when Bitcoin falls. He described the offer as a “volatility-proof” loan that lets users borrow dollars while keeping their BTC posted as collateral.

The launch follows Strike’s first Bitcoin-backed loan product, which arrived in May 2025. As previously reported, Strike issued more than $10 million in BTC-backed loans within two days of that launch.

No margin calls, but not risk-free

The new product removes price-triggered actions tied to loan-to-value levels. Mallers said, “No margin calls. No price liquidations. No matter how far bitcoin falls, your bitcoin doesn’t move.”

That structure differs from many crypto lending products, where a sharp price drop can force borrowers to add collateral or face liquidation. Strike says borrowers can keep their collateral untouched if they make payments on time.

The protection has limits. If a borrower misses an interest or maturity payment, Strike gives a 10-day window to pay or contact the company. If the borrower does not respond or settle the overdue amount, Strike may sell part of the Bitcoin collateral.

Mallers also warned users about the difference between price risk and payment risk. “That’s why we call it ‘volatility-proof,’ not ‘liquidation-proof,’” he said.

Higher cost funds the protection

The new loan carries a higher cost than Strike’s standard Bitcoin-backed loans. The annual percentage rate can reach 14.2%, based on a 2.95 percentage-point premium above Strike’s standard loan range.

Strike’s standard loan product has charged rates between 7.75% and 11.25%, depending on terms and payment choice. The “volatility-proof” version also uses a shorter six-month term and a maximum initial loan-to-value ratio of 45%.

In simple terms, a borrower who posts $100,000 in Bitcoin can borrow up to $45,000. The lower borrowing limit and higher rate give Strike more room to manage the risk of sharp BTC price moves.

Mallers said the added cost supports hedging. “The secret sauce is that we’re taking the extra charge that we’re giving you guys and we’re putting it on extra hedges in the market to protect all of us,” he said.

Bitcoin lending market searches for trust

The launch comes while crypto lenders keep testing ways to make Bitcoin-backed credit easier to use. A Ledn research report found that 88% of surveyed crypto holders would consider a crypto-backed loan, while only 14% currently use one.

Ledn and Protocol Theory called that gap a trust problem, not only a demand problem. Market volatility, fear of liquidation, and low confidence in lenders have limited wider use.

Other firms also continue to build crypto-backed lending products. As crypto.news previously reported, Coinbase launched crypto-backed loans in the U.K. through Morpho on Base, allowing users to borrow up to $5 million in USDC against Bitcoin, Ethereum, and cbETH.

Strike’s new product tries to address one of the main fears in Bitcoin lending: forced selling during market crashes. It does not remove repayment risk. Borrowers still need to pay on time, and the higher rate makes the product costly for users who need longer-term credit.

The U.S. Commodity Futures Trading Commission (CFTC) has filed a federal lawsuit against Trevor Vernon, a North Carolina man, and his company, Argent Capital Management, alleging they operated a crypto-involved commodity pool that defrauded investors of more than $14 million.

In its complaint filed Tuesday, the CFTC alleges Vernon solicited $14.8 million from at least 60 investors between March 2022 and February 2026 by presenting himself as a successful trader, while investors’ funds were allegedly used to generate “consistent and catastrophic losses.” The CFTC described the alleged misconduct as “akin to a Ponzi scheme,” and said it included trading in Bitcoin and Ether alongside equity index futures and related options.

Key takeaways

• The CFTC lawsuit alleges an investor-raising scheme tied to a commodity pool featuring both crypto and equity index derivatives.
• The agency claims investors were solicited with false performance messaging while losses were allegedly hidden, including through alleged misappropriation of funds.
• The complaint asserts Vernon violated federal commodities laws by failing to register the pool as required.
• The CFTC is seeking permanent restrictions on Vernon, along with potential disgorgement, penalties, and restitution.

A rare CFTC action in crypto underscores regulator focus

Crypto enforcement by the CFTC is comparatively infrequent, and the agency has faced ongoing scrutiny from some lawmakers about whether it has adequate resources to oversee a sector that has grown quickly and operates across multiple regulatory frameworks. This case stands out because it blends traditional commodities derivatives—such as equity index futures and options—together with cryptocurrency trading.

According to the CFTC’s lawsuit, the pool used a mix of instruments that the agency alleges were central to both returns claims and investor solicitation. The regulator’s emphasis on the commodity-pool structure is important: it signals that, where crypto is combined with derivatives and investor pooling, the CFTC may pursue conduct that fits within its commodities jurisdiction.

The allegations: hidden losses and misappropriated funds

Central to the CFTC’s claims is what it describes as Vernon’s pattern of misleading investors and obscuring the pool’s performance. The complaint alleges Vernon made false statements to both existing and prospective investors, including through quarterly account updates and monthly performance emails.

The CFTC alleges that trading across the pool—including crypto holdings such as Bitcoin and Ether, which the agency asserted were commodities—along with equity index futures and options resulted in losses exceeding $8.6 million. The regulator says Vernon did not disclose these losses to investors.

In addition, the CFTC claims Vernon misappropriated investor funds in a way it characterizes as similar to a Ponzi scheme—using money from investors, according to the agency, to pay earlier participants in order to conceal the underlying losses. The complaint states that at least $3 million was misappropriated for investor payments in that alleged manner.

The lawsuit also alleges personal misuse of funds: it claims Vernon misappropriated $136,000 for private air travel. The CFTC’s framing suggests it views the alleged conduct as not only misrepresentation but also improper diversion of pooled investor capital.

Registration failures and purported regulator misstatements

Beyond fraud-related allegations, the CFTC says Argent Capital Management failed to register with the agency as required under federal commodities law. Registration obligations are frequently a focal point in CFTC enforcement because they determine whether an operator is meeting baseline regulatory requirements for offering and running commodity-related investment products.

The complaint further alleges Vernon made false statements to the CFTC in January concerning issues the agency later raised in its lawsuit. The CFTC says Vernon’s conduct violated multiple legal requirements, not just investor communications and trading results.

Overall, the CFTC charged Vernon with seven counts relating to fraud, failure to register, and making false statements. Those counts reflect a broader enforcement approach that targets both how investors were recruited and how the pool was managed, including compliance steps that the regulator says were not followed.

What the CFTC is asking the court to do

In addition to seeking monetary remedies, the CFTC asked the court for injunctive relief aimed at preventing future misconduct. The regulator is requesting a permanent ban on Vernon from registration and trading, as well as disgorgement, penalties, and restitution.

These requests matter for investors and market participants because they signal the CFTC’s view that the alleged conduct warrants more than an order limited to the specific pool. A permanent prohibition and restitution-focused relief are typically designed to reduce the risk of repeat behavior and to address, to the extent possible, the financial harm described in the complaint.

More broadly, the case may also influence how firms and individuals structure “commodity pool” offerings that involve crypto trading or claim crypto-related performance. If the allegations reflect actual conduct proven in court, it would highlight how the CFTC may treat certain crypto activities as part of a broader commodities-and-derivatives framework—especially when an operator solicits outside capital and markets results while allegedly failing to disclose losses.

What to watch next

Readers should watch how the court responds to the CFTC’s requested remedies and whether the case proceeds on the specific theories of jurisdiction and alleged misappropriation outlined in the complaint. Until factual issues are resolved, the key uncertainty remains the extent to which Vernon and Argent Capital Management can rebut the CFTC’s claims regarding hidden losses, alleged investor misrepresentations, and compliance failures.

CFTC press release

Secret Network is seeking to move SCRT from Cosmos to Arbitrum, citing security risks, weaker liquidity, and older code.

In a July 7 governance post, the privacy-focused blockchain said the plan would create a new ERC-20 SCRT token on Arbitrum through a one-time snapshot on Sept. 1. The team said native and staked SCRT balances would count, while sSCRT, bridged SCRT, contract-held tokens, and IBC assets would not qualify.

The proposal has not passed yet. The team said the move needs a community vote, and the migration will not proceed if holders reject it.

AI exploit risk drives security concerns

The team said security sits at the center of the proposal. It pointed to the recent Axelar-Secret IBC bridge exploit, which crypto.news previously reported led Axelar to disable Secret Network bridge routes after about $4.7 million in bridged assets were taken.

Secret said the exploit did not touch native SCRT, its core privacy protocol, or its confidential compute model. Still, it said the event showed the risk of old bridge paths and under-maintained code in a smaller ecosystem.

“The security risk is the part we take most seriously,” the team said. It also warned that “with AI, the cost of attacking stale code is falling across the board,” as models get better at reading contracts and finding weak points.

Cosmos liquidity pressure adds to case

Secret Network said Cosmos was the right home in 2020 because appchains, IBC, wallets, and infrastructure had stronger momentum. It now says the market has changed, with lower liquidity and fewer builders staying in the ecosystem.

Moreover, Anoma co-founder Christopher Goes warned in January that Cosmos was facing deep stress as projects such as Penumbra, Osmosis, and Noble reduced work, explored exits, or shifted resources elsewhere.

DefiLlama data shows Secret has about $1.32 million in DeFi TVL, while Cosmos chains have about $2 billion. By comparison, L2Beat lists Arbitrum One as the largest Ethereum scaling network by total value secured, with about $17.4 billion.

SCRT holders face snapshot rules

If the proposal passes, SCRT Labs plans to end official support for the Cosmos-based Secret L1 on Sept. 1. The old chain could keep producing blocks if enough validators continue running it, but that would depend on third-party support.

The team also said it will release Secret’s source code under a permissive open-source license. It proposed reducing inflation to 5% from 9% after the move, while keeping SCRT as the governance token.

Users would need to move certain assets before the snapshot. The proposal asks holders to convert eligible balances back to native or staked SCRT and move IBC assets back to their home chains.

SCRT holders reacted poorly to the proposal. CoinGecko data showed the token trading near $0.041, down about 25% in 24 hours and more than 99% below its 2021 peak.