Crypto World
Robinhood Chain flips Solana in revenue as gas subsidy ends
A two-month-old Layer 2 chain is out-earning every blockchain on Earth, powered by a memecoin casino and a gas subsidy that expires at the end of September.
Summary
- Robinhood Chain generated $4.01 million in chain revenue on Sept. 2, 2026, exceeding Solana ($81,714), Ethereum, and Tron on the same DeFiLlama leaderboard.
- Cumulative DEX volume crossed $47 billion in under two months, ranking fifth among all chains by 30-day volume at $15 billion, but the majority of that activity flows through memecoin launchpad Pons and trading bot GMGN rather than the tokenized stocks Robinhood pitched at launch.
- The 90-day gas subsidy covering all Robinhood Wallet transactions expires on Sept. 29, meaning users currently paying zero for trades will face real costs for the first time.
- Pons collected $4.89 million in fees on Aug. 31 alone, surpassing Solana pump.fun every day since Aug. 29, while launching roughly 22,600 new tokens in a single day at peak.
- Arbitrum collects 10 percent of net sequencer revenue from Robinhood Chain, sending an estimated $377,000 to its DAO treasury on the record-breaking Sept. 1 fee day alone.
Two months ago, Robinhood launched a blockchain. The pitch was regulated, 24/7 tokenized stock trading for 120 countries. The reality is something else entirely.
On Sept. 2, Robinhood Chain posted $4.01 million in chain revenue on $4.45 million in fees, according to DeFiLlama. That placed it above Solana, Ethereum, and Tron on the same page. Just six days earlier, its daily revenue sat at $179,815. The jump is not gradual. It is vertical.
The numbers look like the kind of growth that venture capitalists frame on their walls. But they come with an asterisk the size of the chain itself: every transaction on Robinhood Wallet is free. The 90-day gas subsidy that launched alongside the mainnet on July 1 expires on Sept. 29, and nobody knows what happens when the bill arrives.
The revenue that is not really revenue
The first thing to understand about Robinhood Chain revenue is what it measures and what it does not.
The $4.01 million figure tracks fees paid by users at the application layer, primarily through Pons, GMGN, and Uniswap. These are not gas fees in the traditional sense. Robinhood Wallet users pay nothing for on-chain execution. The fees that DeFiLlama counts come from memecoin launchpad spreads, trading bot commissions, and DEX swap fees baked into the protocols people are using.
This distinction matters. When Solana earns $81,714 in daily chain revenue, that comes from actual gas paid by users to validators. When Robinhood Chain earns $4.01 million, most of it flows to third-party applications sitting on top of a subsidized execution layer. The chain itself is burning cash to keep the lights free.
DeFiLlama also reported $4.32 million in application revenue and $24.4 million in total fees paid on the same day. Those bigger numbers include every fee a user encounters across the entire stack, from DEX spreads to bot commissions to launchpad cuts. The gap between $4.45 million in chain fees and $24.4 million in total fees reveals how much value the application layer extracts on top of the base chain. Users are paying plenty. They are just not paying Robinhood.
Robinhood has not disclosed what the gas subsidy costs. The company reported $1.31 billion in total Q2 revenue, with crypto transaction revenue falling 38 percent year-over-year to $100 million. Prediction markets, which generated $156 million, overtook crypto for the first time in company history. The chain launched after Q2 closed, so the first full quarter of mainnet data will show up in Q3 results due late October.
The question of who keeps the money is surprisingly murky. CryptoSlate reported that $2.7 million poured into Robinhood Chain applications in one day, but noted that it “says little about Robinhood’s actual take.” The company has not publicly disclosed its own revenue share from on-chain activity, its sequencer margin, or the internal cost of the gas subsidy. Until Q3 earnings arrive, the market is flying blind on the chain’s actual economics.
Pons ate the tokenized stock narrative
Robinhood built its chain for stocks. Memecoins took it over.
Pons, a token launchpad modeled on Solana pump.fun, has become the single largest fee generator on Robinhood Chain. On Aug. 31, Pons pulled in $4.89 million in fees, almost triple the $1.72 million pump.fun earned on the same day. Users paid about $5.95 million through Pons in the most recent 24-hour period, ranking it fourth globally among all protocols tracked by DeFiLlama, above pump.fun at $4.64 million. At peak, users launched roughly 22,600 new tokens through Pons in 24 hours. That is one new memecoin every 3.8 seconds.
GMGN, a sniping and trading bot, collected $956,450 in daily fees. Together with Pons, the two platforms capture about 70 percent of all launchpad and trading bot fees across the entire crypto ecosystem. Uniswap, the protocol that was supposed to anchor the tokenized stock vision, ranks a distant third.
The irony is thick. Robinhood spent years fighting its reputation as a gamification engine for retail speculation. It built an entire blockchain to prove it could do something more serious. And within 60 days, its chain became the most popular memecoin casino in crypto, outpacing the Solana ecosystem that spent years building that exact niche.
Tokenized stock volume on Uniswap did reach $1.5 billion in cumulative trading over six weeks, with a single-day peak of $130 million on Aug. 29. That is real. But it is dwarfed by the overall $47 billion in DEX volume, meaning tokenized stocks represent roughly 3 percent of actual trading activity on a chain purpose-built for them.
The gas subsidy math
Robinhood launched its gas subsidy on July 1 alongside the mainnet, covering all swap costs above $5 for Robinhood Wallet users. In practice, most users pay zero. The subsidy runs for 90 days, putting the expiry at approximately Sept. 29.
The subsidy applies only to the Robinhood Wallet. Users transacting through MetaMask, Rabby, or other third-party wallets already pay standard gas fees. This creates two tiers of users: the Robinhood-native crowd trading for free, and the crypto-native crowd paying their own way.
Nobody outside Robinhood knows the total cost. But the chain is processing 7.6 million daily transactions and closing in on Base, which handles 9.2 million. Even with Arbitrum Orbit’s low execution costs, covering gas on millions of daily transactions for 90 days adds up. A back-of-the-envelope calculation at even $0.001 per transaction on 7 million daily transactions runs to $7,000 a day, or $630,000 over 90 days. At $0.01 per transaction, that becomes $6.3 million. Neither figure is large for a company earning $1.31 billion a quarter, but the subsidy cost matters less than the behavioral shift it has created. Users have spent two months treating gas as someone else’s problem. Retraining that expectation is the hard part.
The strategic logic is obvious. Free gas drives adoption. Adoption drives volume. Volume drives fee revenue from protocols like Pons. Protocol revenue drives attention and, eventually, Robinhood’s own take rate once the subsidy ends. It is the same playbook Uber ran for a decade: subsidize demand, capture the market, flip the switch.
The question is whether crypto users behave like rideshare passengers. Uber riders had no alternative once cabs disappeared. Memecoin traders have Solana, Base, and a dozen other chains one bridge transaction away.
What $47 billion in volume actually means
Robinhood Chain crossed $47 billion in cumulative DEX volume by mid-August, a milestone most Layer 2s took years to reach. It now sits fifth among all chains by 30-day volume at $15 billion, and daily volume hit an all-time high of $1.49 billion, up 131 percent over seven days and 517 percent over 30 days.
Strip out the context and those numbers are staggering. Put the context back, and the picture gets more complicated.
The vast majority of that volume runs through Pons and GMGN. Pons alone captured 63.9 percent of the $7.65 million paid to crypto launchpads on Aug. 31. These platforms cater to pure speculation. Users launch memecoins, snipe early liquidity, dump within minutes, and move on. The volume is real in the sense that tokens are changing hands, but the economic activity underneath is closer to a slot machine than a stock exchange.
Total value locked on Robinhood Chain surged from $4 million in June to roughly $1.4 billion by late August, before pulling back to about $738 million on Sept. 1 per DeFiLlama. That pullback happened during the chain’s highest-revenue days, which suggests some of the early TVL was parked capital waiting for opportunities rather than committed liquidity.
Still, reaching 700 million in TVL within two months is a trajectory no Ethereum Layer 2 has matched this early. Base, arguably the closest comparison as another corporate-backed L2, took significantly longer to reach similar numbers.
The user metrics tell a similar story of explosive early growth. Robinhood Chain surpassed one million active wallets within two weeks of launch. By July 20, it registered 191,855 daily active wallets out of 864,665 across all EVM chains, putting it ahead of Polygon and Base and behind only BNB Chain. On July 21, it briefly surpassed Base itself with 324,000 daily active wallets versus 275,000. Active wallets do not equal unique users since bots and multi-wallet users inflate the count, but the scale of early engagement is difficult to dismiss.
Arbitrum collects its rent
Robinhood Chain is not an island. It settles to Ethereum through Arbitrum, and that relationship comes with a price.
Under Arbitrum’s Expansion Program, every Orbit chain pays 10 percent of net sequencer revenue to the Arbitrum DAO. The split runs 8 percent to the DAO treasury and 2 percent to the Developer Guild. The fee calculates against revenue after operating costs, so it tracks actual profitability rather than raw throughput.
On Sept. 1, when Robinhood Chain posted $3.75 million in daily fees, roughly $377,000 flowed to the Arbitrum DAO in a single day. Cumulative fees have already passed $13 million since the July 1 launch, meaning Arbitrum has collected well over $1 million from the chain. One analysis from Spotted Crypto estimated that Robinhood Chain revenue already exceeds Arbitrum One by 120 times, making Robinhood the most valuable tenant in the entire Orbit ecosystem.
Steven Goldfeder, co-founder of Offchain Labs, called Robinhood Chain’s sequencer revenue a potential “13th $100 million revenue line” for Robinhood. He is not wrong about the trajectory. But the 10 percent haircut means Arbitrum benefits from every dollar of growth, creating an unusual dynamic where Robinhood’s blockchain success directly funds the ecosystem of a potential competitor.
For Arbitrum token holders, this is an unexpected windfall. ARB jumped on the revenue-sharing news. For Robinhood, it is a cost of doing business that only grows as the chain scales. At current run rates, Arbitrum could collect upwards of $10 million annually from Robinhood Chain alone. That is real money flowing to a DAO treasury, and it creates a financial incentive for Arbitrum to keep its biggest chain happy.
The corporate L2 war just got interesting
Robinhood Chain did not emerge in a vacuum. It launched into a Layer 2 landscape already dominated by corporate-backed chains fighting for the same users. Base, backed by Coinbase, has been the benchmark since mid-2023. Tempo, Kraken’s entry, launched earlier in 2026. Each one uses a different stack, targets a slightly different user base, and runs a different economic playbook.
What separates Robinhood from the pack is the sheer aggression of its approach. Coinbase never subsidized gas on Base. Kraken launched Tempo without a comparable promotional period. Robinhood went all-in on a 90-day free trial that generated eye-popping metrics and forced every competitor to address the same question: should we match this?
The broader trend is clear. Traditional finance companies are building their own chains because the margin on trading happens at the infrastructure layer. If you own the chain, you own the sequencer, and the sequencer captures value on every transaction. Robinhood’s crypto transaction revenue fell 38 percent in Q2 to $100 million. If the chain can generate even a fraction of that in sequencer revenue once the subsidy ends, the strategic bet pays for itself.
The risk is that every corporate L2 ends up as a walled garden. Users on Robinhood Chain trade Robinhood Stock Tokens. Users on Base trade through Coinbase infrastructure. Users on Tempo trade through Kraken. The vision of open, permissionless finance starts to look more like the traditional brokerage landscape with a blockchain wrapper. Bridges exist, but liquidity fragments. Each chain optimizes for its parent company’s products, and cross-chain composability becomes an afterthought. The irony of building permissionless technology to recreate permissioned silos is not lost on crypto veterans, but the economics are hard to argue with. The company that owns the chain owns the margin.
The October cliff
Oct. 1 will be the most important day in Robinhood Chain’s short history.
When the gas subsidy expires, every Robinhood Wallet user will face transaction costs for the first time. The fees will still be low by Ethereum mainnet standards since Arbitrum Orbit keeps execution costs minimal, but the psychological shift from zero to anything is enormous.
Crypto has seen this movie before. Free-to-play chains attract enormous volume during promotional periods, then watch activity crater when costs return. The question is whether Robinhood Chain has built enough sticky usage in 90 days to retain a meaningful share of its user base.
The bull case rests on three pillars. First, the chain has real products people want to use: Pons for memecoin launches, Uniswap for tokenized stock trading, and Robinhood Earn for a reported 7 percent yield. Second, Robinhood has 27 million funded accounts and can funnel existing users onto the chain through its app. Third, even small gas fees on Arbitrum Orbit are cheap enough that casual users may not notice.
The bear case is simpler. Memecoin traders are the most mercenary users in crypto. They go wherever the cost is lowest and the liquidity is deepest. The moment Robinhood Chain charges anything, Solana and Base offer a well-established alternative. The 22,600 daily token launches on Pons did not happen because Robinhood built a better mousetrap. They happened because the mousetrap was free.
There is a middle scenario that deserves attention. Robinhood could extend the subsidy, reduce it gradually, or restructure it to cover only certain transaction types. The company has not announced plans either way. A partial subsidy that covers tokenized stock trades but charges for memecoin speculation would align the economics with the original product vision and filter out the noise. Whether Robinhood has the appetite for that kind of surgical pricing remains to be seen.
Robinhood’s Q3 earnings, due late October, will be the first to include a full quarter of mainnet activity and the first to show results after the subsidy expires. That earnings call will tell the real story.
Tokenized stocks deserve a separate verdict
Lost in the memecoin noise is the tokenized stock product, which remains the actual long-term thesis for the chain.
Uniswap processed $1.5 billion in tokenized stock trades over six weeks. Uniswap V4 controls roughly 73 percent of all tokenized stock liquidity on the chain, with V3 handling the remaining 26 percent. The protocol holds approximately 99 percent of all stock token DEX liquidity, making it effectively the sole venue. New entrants like PAIR, which launched a multipool RWA launchpad pairing new tokens with baskets of tokenized stocks and backed by AWS infrastructure, are beginning to chip at that monopoly.
Ninety-five tokenized stocks trade 24/7, including heavyweights like NVDA and AAPL. Tokenized QQQ drove 288 percent of July volume, suggesting strong demand for index exposure in a DeFi-native format. The Uniswap V4 hooks system has turned the chain into a playground for custom trading strategies targeting tokenized equities, adding programmability that traditional brokerages simply cannot match.
These numbers are small relative to the memecoin volume, but they carry different characteristics. Tokenized stock traders are more likely to be long-term users with real portfolio allocations. They are less sensitive to gas costs because their trade sizes justify small fees. And the regulatory infrastructure supporting tokenized stocks, with SEC approval and availability in 120 countries, gives the product a moat that memecoins never have.
The broader RWA market has ballooned to $38.29 billion as of mid-August, with tokenized equities growing from $2 million in mid-2025 to between $2 billion and $2.5 billion by mid-July 2026. Robinhood Chain is not the only player, with Ondo Global Markets crossing $1 billion in TVL by May, but it is the only one backed by a publicly traded brokerage with 27 million accounts and a brand that retail investors already trust.
If Robinhood Chain survives October, it will probably be the tokenized stock product that saves it, even though the memecoins are the ones paying the bills right now.
What to watch
Daily DEX volume in the first week of October: A drop below $200 million from the current $1.49 billion would signal that the gas subsidy was driving the supermajority of activity.
Pons daily token launches after Sept. 29: If memecoin creation falls below 5,000 per day, the launchpad narrative collapses and takes the chain’s fee revenue with it.
Robinhood Q3 earnings call in late October: Management commentary on chain operating costs, the subsidy burn rate, and user retention post-subsidy will reveal whether the economics work.
Uniswap tokenized stock volume as a share of total DEX volume: If stock tokens climb from 3 percent to 10 percent or higher after the memecoin exodus, it proves the real product has legs.
Arbitrum DAO revenue from the 10 percent sequencer cut: A sustained daily transfer above $100,000 post-subsidy would confirm the chain has found durable demand.
What is Robinhood Chain?
Robinhood Chain is an Ethereum Layer 2 blockchain built on Arbitrum Orbit that launched on July 1, 2026. It runs 100-millisecond block times, settles to Ethereum for security, and was designed for tokenized stock trading available in more than 120 countries. In practice, it has attracted massive memecoin activity alongside its stock token product.
How much revenue did Robinhood Chain generate on Sept. 2?
The chain generated $4.01 million in chain revenue on $4.45 million in total fees, according to DeFiLlama. That placed it above Solana ($81,714), Ethereum, and Tron on the same day. Six days earlier, daily revenue sat at just $179,815, making the surge a 22-fold increase in under a week.
What is the gas subsidy and when does it expire?
Robinhood covers gas costs for all transactions made through the Robinhood Wallet, making trades effectively free. The 90-day subsidy launched with the mainnet on July 1 and expires around Sept. 29, 2026. Users transacting through third-party wallets like MetaMask already pay standard fees.
What is Pons and why does it matter?
Pons is a memecoin launchpad on Robinhood Chain modeled on Solana pump.fun. It has become the chain’s largest fee generator, collecting $4.89 million in fees on Aug. 31 and processing up to 22,600 new token launches in a single day. It has earned more daily fees than pump.fun every day since Aug. 29, and it now ranks fourth globally among all protocols by 24-hour fees.
How much tokenized stock trading happens on the chain?
Uniswap processed about $1.5 billion in cumulative tokenized stock trades over six weeks, with a single-day peak of $130 million on Aug. 29. Uniswap V4 handles roughly 73 percent of stock token liquidity. That said, tokenized stocks represent only about 3 percent of total DEX volume on the chain.
What is Arbitrum’s 10 percent revenue share?
Under the Arbitrum Expansion Program, every Orbit chain pays 10 percent of net sequencer revenue to the Arbitrum DAO. The split is 8 percent to the treasury and 2 percent to the Developer Guild. On Sept. 1, this meant roughly $377,000 flowed to Arbitrum from Robinhood Chain in one day.
What will happen when the gas subsidy ends?
Nobody knows for certain. The optimistic scenario is that enough sticky usage exists across tokenized stocks and DeFi products to keep a meaningful user base paying small fees. The pessimistic scenario is that mercenary memecoin traders migrate to Solana or Base the moment trades cost anything, cratering volume and fee revenue overnight. A middle path would be Robinhood extending or restructuring the subsidy to cover only certain transaction types.
How does Robinhood Chain compare to Base?
Both are corporate-backed Ethereum Layer 2s. Robinhood Chain briefly surpassed Base in daily active users (324,000 versus 275,000 on July 21) and is closing in on its 9.2 million daily transactions with 7.6 million of its own. Base took significantly longer to reach similar TVL levels. The key difference: Base never offered a blanket gas subsidy, so its usage numbers reflect paid demand from day one.
Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. This article is for informational and educational purposes only. Published Sept. 4, 2026.
SoFi Technologies and Kraken parent Payward announced a partnership on Sept. 3 connecting SoFi’s banking and dollar-settlement services with Kraken’s digital asset trading infrastructure.
Summary
- Payward will join SoFi’s real-time settlement network, enabling round-the-clock U.S. dollar transfers for institutional clients.
- Kraken will list SoFiUSD, extending access to SoFi’s dollar-redeemable bank-issued stablecoin across its trading platform.
- SoFi will route digital asset orders through Kraken Prime as an additional source of liquidity.
- Qualified custody may follow as the partnership expands, but neither company provided a deployment timetable.
- SOFI closed near $18.51 after rising 3.7%, without evidence attributing gains solely to partnership news.
Payward will join the SoFi Exchange Network, known as SEN, while Kraken will list the SoFiUSD stablecoin. SoFi will use Kraken Prime as an additional liquidity and execution provider for cryptocurrency trades placed through its application.
SoFi gives Kraken access to 24/7 dollar settlement
SEN allows institutional clients to transfer and settle U.S. dollars outside traditional banking hours. Payward’s participation will give eligible Kraken institutional customers access to those settlement rails for round-the-clock liquidity management.
The companies said the connection removes delays that can arise when cryptocurrency markets remain open but banking services are unavailable. Digital asset platforms operate continuously, while many conventional bank transfers remain tied to business days and scheduled processing periods.
Payward will also use SoFi’s Big Business Banking services. SoFi introduced that division in April to combine enterprise banking, payments and digital asset capabilities within one offering.
As previously reported, SoFi’s enterprise platform brought fiat and crypto services together while allowing institutional customers to manage U.S. dollars, SoFiUSD and selected digital assets.
Kraken Prime will execute SoFi crypto orders
SoFi will route cryptocurrency order flow through Kraken Prime, which uses smart routing to compare prices and available market depth across supported trading venues. The system selects where an order should be executed rather than relying on one order book.
Kraken said the arrangement could provide SoFi with deeper liquidity and improved execution pricing. The final price available to a customer will still depend on market conditions, order size, available liquidity and applicable fees.
Kraken Prime combines trading, custody and other institutional services through one relationship. SoFi described it as an additional liquidity source, meaning the partnership does not necessarily make Kraken its sole execution provider.
Qualified custody services may be added as the relationship develops. Neither company provided a launch date, named a custody entity or described which assets could eventually receive that support.
“The infrastructure behind that experience should connect them to deep, liquid markets built to operate at scale,” Payward co-CEO David Ripley said.
SoFiUSD expands beyond SoFi’s banking application
Kraken will list SoFiUSD for retail, professional and institutional customers. The stablecoin is designed to maintain one-to-one redemption for U.S. dollars and is issued through SoFi’s regulated banking structure.
SoFiUSD became available through SoFi’s application in May. The initial rollout supported Ethereum and Solana, giving members the ability to buy, sell, hold and convert the token. The product opened stablecoin access to nearly 15 million SoFi members.
The Kraken listing gives SoFiUSD distribution outside its issuer’s application. However, the companies did not disclose available trading pairs, supported deposit networks, initial liquidity or the precise listing time.
SoFi has also said federal stablecoin rules may require SoFiUSD to migrate to a separately licensed or regulated entity. That possible restructuring was disclosed earlier and is not described as part of the Payward agreement.
Partnership connects two expanding financial platforms
The arrangement reflects expansion from both directions. SoFi is adding digital asset trading, stablecoins and blockchain settlement to its banking services. Kraken has expanded beyond cryptocurrency trading into equities, derivatives and institutional prime brokerage.
SoFi’s crypto business generated $121.6 million in transaction revenue during the first quarter of 2026, according to its financial disclosures. Related costs reached $120.7 million, leaving approximately $852,000 in net crypto transaction revenue. Crypto.news previously found that transaction costs consumed most of SoFi’s crypto revenue.
SOFI shares closed near $18.51 on Sept. 3, up approximately 3.7% for the session. The shares traded between $17.63 and $18.70 during the day.
No verified evidence showed that the partnership announcement alone caused the increase. Broader market conditions and company-specific trading may also have contributed.
The companies said they could extend the relationship into payments, treasury services, lending and additional digital asset products. Those areas remain prospective, with no deadlines or confirmed product launches announced.
Bottomline has partnered with Chainlink to connect a payments network processing more than $16 trillion annually with public and private blockchains, giving over 600 bank customers a route to cross-chain and cross-border settlement while retaining ISO 20022 messaging.
Summary
- Bottomline has partnered with Chainlink to connect its $16 trillion annual payments network with public and private blockchains.
- More than 600 bank customers will be able to access onchain payment rails while continuing to use familiar ISO 20022 messaging.
- Chainlink CCIP will handle cross chain interoperability, while CRE will coordinate payment workflows between existing banking systems and blockchain networks.
- The partnership provides the technical connection for blockchain settlement, but neither company has disclosed how many Bottomline banks will initially use the service.
According to Chainlink, Bottomline will use its interoperability and orchestration infrastructure to connect existing payment systems with blockchain networks, allowing participating financial institutions to access onchain payment rails through a single network-agnostic connection.
Bottomline ranks among the top three Swift service providers and handles more than $16 trillion in payments each year across its platforms. The company serves over 600 banks, 1,200 financial institutions and 10,000 businesses globally, giving the integration access to an established network already processing large volumes of institutional payments.
Banks using the service would not need to replace their existing messaging systems to access blockchain settlement. Payment instructions can continue to use ISO 20022, the standard used by financial institutions to structure and exchange transaction information, while Chainlink connects the instruction with the required blockchain infrastructure.
Chainlink will connect Bottomline payments across blockchains
Chainlink’s Cross-Chain Interoperability Protocol, or CCIP, will handle communication and transfers of tokenized value across supported blockchain networks.
Its Chainlink Runtime Environment, known as CRE, will coordinate payment workflows from one end of a transaction to the other. The infrastructure can manage routing and operational steps as payment instructions move between existing financial systems and blockchain networks.
Using both components gives Bottomline customers access to multiple public and private chains through one connection instead of requiring separate infrastructure for each blockchain.
The setup means a participating bank could send an instruction through the same ISO 20022 messaging process it already uses. Chainlink infrastructure would then handle the blockchain components needed to execute the transaction across the selected networks.
Chainlink has spent the past several years developing CCIP as an interoperability layer for applications that need to transfer data or assets across separate blockchains. In July, Aave made CCIP its default cross-chain infrastructure for deposits, withdrawals, GHO transfers, Stable Vaults and governance operations.
BitGo followed in August by selecting CCIP as the exclusive cross-chain provider for its Wrapped Bitcoin ecosystem, which had roughly $7.3 billion in value at the time. BitGo retained control over WBTC contracts, transfer limits and cross-chain settings under the arrangement.
Bottomline banks can keep using ISO 20022
The Bottomline partnership is structured around maintaining the systems that banks already use instead of requiring financial institutions to move payment operations directly onto a particular blockchain.
For its more than 600 banking customers, Bottomline can keep the existing messaging layer in place while Chainlink operates between traditional payment infrastructure and the blockchain used for settlement.
Cross-border payments remain one of the areas targeted by the integration. Such transactions can move through several intermediary banks before reaching the recipient, adding settlement time and transaction costs at different stages of the payment process.
The supplied partnership material said cross-border transactions can still take days to settle and fees can consume 5% or more of a transfer’s value. Chainlink and Bottomline are providing an alternative settlement route in which tokenized value can move between blockchain networks while banks retain their existing operational processes.
Access to the infrastructure does not mean Bottomline’s more than $16 trillion in annual payment volume will move onchain. The partnership creates the technical connection for participating banks, while individual institutions will determine whether they use blockchain settlement and how much transaction activity they route through it.
No transaction volume, implementation schedule or list of Bottomline banking customers using the blockchain connection was disclosed in the announcement.
Chainlink has been building links with major financial institutions
The agreement follows a series of Chainlink projects involving banks, asset managers and established financial market infrastructure.
In June, crypto.news previously reported that Swift, JPMorgan and UBS were among the financial institutions working with Chainlink infrastructure as companies tested tokenized assets, cross-chain settlement and connections between existing financial systems and blockchains.
Swift has previously tested Chainlink infrastructure for transferring tokenized value while allowing financial institutions to continue working with existing Swift systems. The model resembles the Bottomline integration by keeping familiar financial messaging infrastructure in place while blockchain technology operates underneath the transaction workflow.
Chainlink has pursued another institutional initiative through Project Pangea, which involves more than 50 financial institutions across Europe and South Korea. Participants collectively manage more than $10 trillion in assets, with the project focused on foreign exchange transactions and T+0 settlement, where trades can settle on the same day they are executed.
JPMorgan has used Chainlink in public blockchain settlement as well. In May 2025, the bank completed a transaction involving tokenized U.S. Treasuries through Ondo Finance and Chainlink, representing JPMorgan’s first settlement of a transaction on a public blockchain.
UBS has worked with Chainlink on tokenized fund infrastructure, including an onchain subscription and redemption workflow for a tokenized money market fund. Previous projects involving Swift, UBS and Chainlink have tested how tokenized funds could interact with existing fiat payment systems used by financial institutions.
Institutional use of the network has continued expanding into 2026. Standard Chartered identified Swift, DTCC, Euroclear, JPMorgan, Mastercard, UBS, Fidelity and S&P Global among institutions using Chainlink services in an August report.
The bank’s digital asset research team said customers outside crypto-native markets were expected to account for an increasing portion of Chainlink fees as tokenization projects moved from testing into production.
Bottomline partnership adds another route for tokenized payments
Financial institutions have been testing several models for moving regulated money and assets onto blockchain infrastructure, ranging from stablecoins and tokenized deposits to tokenized securities and cross-chain settlement systems.
In July, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo were reported to be developing a shared tokenized deposit network designed to support round-the-clock blockchain payments between regulated U.S. banks. The project, being developed with The Clearing House, has targeted the first half of 2027 for launch.
Chainlink’s role focuses on connecting otherwise separate blockchain networks and coordinating transactions between onchain systems and existing financial infrastructure.
CCIP has been live since July 2023 and has expanded across dozens of blockchain networks. Chainlink said its interoperability technology allows financial institutions to connect with multiple networks without building a different integration for every chain.
The Bottomline arrangement applies that infrastructure to a payment provider operating at a considerably larger scale than a single blockchain application. Bottomline processes more than $16 trillion annually, while its services reach hundreds of banks that already use established financial messaging standards.
Tokenization has meanwhile become a larger focus for banks and asset managers as more financial products are issued or represented on blockchains. Estimates cited in the supplied material put the potential tokenized asset market at $16 trillion by 2030.
Chainlink has been positioning CCIP and CRE as infrastructure for that activity, with CCIP handling communication and token transfers between networks while CRE coordinates the transaction workflow surrounding those transfers.
Bottomline customers will retain control over whether they use the blockchain connection. The partnership provides the infrastructure required to access public and private networks through existing payment systems, but neither company has disclosed how many banks have committed to using the service or when the first transactions will be settled through the new connection.
SEC Chair Atkins expects passage, but the September 15 action is a 60-vote cloture hurdle with at least three unresolved fights capable of sinking the most ambitious crypto bill in American history.
Summary
- The Senate cloture vote on September 15 at 2:15 p.m. ET requires 60 votes to proceed; Republicans hold 53 seats but face defections from Senators Rand Paul, Josh Hawley, and possibly Thom Tillis, forcing leadership to find 10 or more Democratic crossover votes when only two crossed over in committee.
- Three unresolved disputes threaten the bill: ethics rules targeting President Trump’s $1.4 billion in crypto income, DeFi developer liability protections under Section 604, and a stablecoin yield provision that puts $1.35 billion in annual Coinbase USDC rewards revenue on the line.
- Seven Democratic senators issued a joint statement calling the current draft insufficient on ethics, consumer protection, and illicit finance, making their support conditional on text changes that have not materialized during the August recess.
- Polymarket odds for 2026 passage have cratered from 82% in February to roughly 16% by late August, and Galaxy Digital has cut its own estimate to 10%.
- If the bill fails, the crypto industry faces regulation by enforcement until at least 2029, a projected 10 to 25% near-term correction in Bitcoin, and a fragmented patchwork of agency rulemaking from the SEC, CFTC, OCC, and FASB.
The Digital Asset Market Clarity Act passed the House 294 to 134 in July 2025 with 78 Democrats voting yes. It cleared the Senate Banking Committee 15 to 9 in May 2026. And now it arrives at the one vote that actually matters with the math working against it and three political landmines sitting in the text.
SEC Chair Paul Atkins told reporters on September 2 that he expects and hopes the legislation will pass the Senate and eventually reach the president for signature. That optimism is worth examining against the actual vote count, the actual provisions in dispute, and the actual political dynamics that have turned a bipartisan achievement into a legislative knife fight.
The Senate returns from recess on September 14. The cloture vote happens the next day. After that, senators have roughly 14 working days before midterm campaign season shuts down the legislative calendar. This is not a generous timeline. It is a deadline with no extension.
The cloture vote is the real vote
September 15 is not final passage. It is a procedural vote on the motion to proceed, which requires 60 senators to agree to advance the bill to full floor debate. Clearing cloture opens the door to amendments and an eventual up-or-down vote. Failing it kills the Clarity Act for 2026 and, given midterm politics, likely until 2029.
The distinction matters because it shapes how senators approach the vote. A cloture vote is a vote to debate, not a vote to approve. Senators who want changes to the bill can theoretically vote yes on cloture and then push amendments during floor debate. In practice, the vote has become a referendum on whether the current text is close enough to warrant proceeding, and the seven Democratic holdouts have made clear they do not think it is.
Senate Majority Leader John Thune filed cloture on the motion to proceed shortly before the August recess, locking in the September 15 date. That move was tactically aggressive. It forced every senator to take a position within 24 hours of returning to Washington, leaving almost no time for last-minute negotiations on the Senate floor.
The vote math that should worry the crypto lobby
Republicans control 53 Senate seats. Simple arithmetic says they need seven Democrats. The arithmetic is not simple.
Senator Rand Paul of Kentucky opposes the bill on libertarian grounds. He views any broad federal regulatory framework as government overreach into technology built to operate without government permission. Senator Josh Hawley of Missouri objects to what he calls favorable treatment for large fintech companies at the expense of smaller competitors and traditional banks. Both are firm no votes.
Senator Thom Tillis of North Carolina, who helped craft sections of the bill, has conditioned his support on stronger ethics language. Senators John Cornyn of Texas and John Curtis of Utah have raised concerns about bank deposit flight and law enforcement access to digital commodity markets, though neither has committed to voting no.
If three Republicans defect, leadership needs 10 Democratic votes. If four defect, the number is 11. In the Senate Banking Committee, exactly two Democrats crossed the aisle: Senators Ruben Gallego of Arizona and Angela Alsobrooks of Maryland. The gap between two and 10 is enormous.
The seven Democrats closest to crossing are Mark Warner of Virginia, Catherine Cortez Masto of Nevada, Raphael Warnock of Georgia, Cory Booker of New Jersey, John Hickenlooper of Colorado, plus Gallego and Alsobrooks. Their joint statement said the current draft “falls short” on ethics enforcement, consumer protection, illicit finance provisions, and market integrity. The language was precise enough to leave the door open and vague enough to walk through it in either direction.
Senate Banking Committee Chair Tim Scott has publicly predicted 12 to 18 Democrats will ultimately vote yes. No public evidence supports that number. The August recess produced zero announced deals on any of the three blocking issues.
The Trump ethics provision: the fight that has nothing to do with technology
The single most explosive clause in the Clarity Act concerns whether elected officials and senior government appointees can profit from cryptocurrency businesses while in office.
President Trump’s 2025 financial disclosure reported more than $1.4 billion in crypto-related income. That total includes roughly $636 million in TRUMP memecoin royalties and over $500 million from World Liberty Financial token sales. Democrats argue that passing a crypto regulatory framework without enforceable ethics guardrails hands a direct financial benefit to the sitting president. That argument lands with voters regardless of party.
The current draft includes a conflict-of-interest provision that bars senior officials and their spouses from issuing or sponsoring digital assets for consideration. Senator Elizabeth Warren’s staff on the Banking Committee published an analysis calling the language “riddled with major loopholes” that would not prevent the president from making his next $1.4 billion in crypto profits. The provision puts sole enforcement power in the hands of Acting Attorney General Todd Blanche, a close Trump ally, and sunsets on January 20, 2029, the day Trump leaves office.
Democrats call the sunset clause an admission that the entire provision was written around one administration. Republicans counter that the ethics standards Democrats want would prevent any lawmaker with a retirement account containing crypto exposure from voting on the bill, a standard applied to no other asset class.
This is the provision that turned the Clarity Act from a financial regulation bill into a political weapon. Every senator on both sides understands the campaign ads that will follow from either vote. Senator Kirsten Gillibrand of New York has said she will not support the bill without an enforceable ban on presidents and senior officials issuing or profiting from crypto. When one of the most crypto-friendly Democrats in the chamber draws that line, the negotiating space gets very small very fast.
The White House pushed Senate Democrats to accept what it called a “historic” ethics deal in late July. Democrats rejected it. No revised offer has been made public.
Section 604 and who is responsible for DeFi code
The second blocking issue is more technical but just as capable of killing the bill. Section 604 shields non-custodial software developers from money-transmitter registration requirements and Bank Secrecy Act obligations. If a developer writes open-source code for a decentralized protocol and never touches user funds, that developer bears no personal liability for how third parties use the code.
The crypto development community has treated this protection as non-negotiable. No other publishing industry holds authors responsible for the actions of their readers, the argument goes, and code is speech.
Law enforcement sees it differently. The National Sheriffs’ Association, the International Association of Chiefs of Police, and the National District Attorneys’ Association have all opposed Section 604 in its current form. Their position is specific: the exemption creates what they call “a compliance-free lane” that money launderers, sanctions evaders, and fraud networks will exploit by routing transactions through mixers and cross-chain bridges that no one is legally required to monitor.
Senator Chris Van Hollen of Maryland introduced an amendment during committee markup that would have imposed direct anti-money-laundering obligations on DeFi protocols and personal liability on developers whose code processes illicit transactions. The amendment was defeated, but Senators Van Hollen, Chris Murphy, and Jeff Merkley have indicated they will not vote for cloture unless the developer liability language is meaningfully tightened.
The DeFi industry spent August lobbying against any changes. Advocacy groups argued that imposing bank-style compliance on open-source developers would drive talent to jurisdictions with lighter regulatory burdens. That argument carries weight with senators whose states host significant blockchain development, particularly Hickenlooper in Colorado, who faces pressure from both the industry and law enforcement groups.
The bill also includes Section 307, which directs Treasury to conduct a risk assessment of self-hosted wallets and report findings to Congress. That provision has drawn quieter opposition from privacy advocates who view it as a precursor to future restrictions on non-custodial wallets.
The stablecoin yield fight that split the banking lobby in half
The third provision capable of sinking the bill sits at the intersection of traditional finance and decentralized technology. The Clarity Act, as currently drafted, permits crypto exchanges to offer yield on stablecoin balances. That single provision threatens the banking industry’s deposit base.
Coinbase generated roughly $1.35 billion in annual revenue from USDC rewards programs in 2025. The stablecoin yield provision would codify those programs into federal law, turning a gray-area offering into an explicitly sanctioned product.
The current text draws a line. Stablecoin yield that is “economically or functionally equivalent” to bank deposit interest is banned. Rewards tied to bona fide activities like transactions, payments, market-making, liquidity provision, governance, validation, and staking are permitted. That distinction sounds clean on paper. In practice, the line between “holding rewards” and “activity-based rewards” is easy to engineer around, and everyone in the room knows it.
A coalition of 78 banking groups, led by the American Bankers Association and the Independent Community Bankers of America, sent a letter urging lawmakers to replace the “functional and economic equivalent” standard with a “substantially similar” standard and to remove language that could create ambiguity around rewards tied to stablecoin balances, duration, or tenure.
Their argument is straightforward. If a customer can earn 4.5% on USDC at Coinbase while a savings account at a regional bank pays 1.2%, the incentive to move deposits is obvious. Banking lobbyists warned Senators Cornyn and Curtis that the provision would trigger deposit flight from community banks and credit unions that simply cannot compete with stablecoin yields backed by Treasury bill portfolios.
The crypto industry’s counter: stablecoin yields are not deposits. They are rewards for holding a specific digital asset. That distinction matters legally even if it looks identical to a consumer. The Financial Accounting Standards Board has separately proposed treating qualifying stablecoins as cash equivalents, a classification that would further blur the line the Clarity Act is trying to draw.
The calendar problem nobody solved over recess
Even if the cloture vote succeeds on September 15, the bill faces a calendar crisis. The CLARITY Act faces a shrinking window that gets smaller by the week.
House Majority Whip Tom Emmer’s office informed Republican members that leadership removed the weeks of September 21 and September 28 from the voting calendar, cutting eight previously scheduled legislative days. Under the revised schedule, representatives return after Labor Day for four voting days and leave Washington on September 17.
That creates a brutal timing problem. The Senate begins its Clarity Act process on September 15. The House leaves two days later. If the Senate passes an amended version of the bill, as it almost certainly would given floor amendments, the House must vote on the amended text. A House that is not in session cannot vote. The bill would then need to wait for the House to return, likely in late October, pushing final action into the post-election lame-duck session where everything becomes unpredictable.
The reconciliation process adds another complication. Senate leadership is simultaneously managing a budget reconciliation bill that consumes floor time and political capital. The Clarity Act must compete for both, and reconciliation takes priority under Senate rules.
What actually changes if the bill passes
If the Clarity Act clears every hurdle and reaches the president’s desk, the impact on crypto markets would be structural and immediate.
The CFTC would gain exclusive jurisdiction over digital commodity spot markets, the largest expansion of the agency’s authority in its history. Every spot trading platform handling digital commodities would require registration. Every intermediary, from custodians to market makers, would need oversight. Sixteen tokens already classified as commodities by joint SEC-CFTC guidance in March 2026, representing roughly 78% of total crypto market capitalization, would shift definitively into the CFTC’s regulatory domain.
Token projects would gain a statutory pathway out of securities classification. The bill uses a four-part mature blockchain test with a hard 20% ownership cap to determine when a network is sufficiently decentralized to qualify as a digital commodity. Projects that clear that bar escape SEC oversight entirely. Projects that do not remain securities subject to registration, disclosure, and enforcement.
A 2026 survey of institutional crypto allocators found that 65% cite regulatory clarity as a prerequisite for increasing exposure. Passage would likely unlock a wave of institutional capital that has been sitting on the sidelines.
The catch: the CFTC is not ready. The agency operates with 556 employees and a $365 million budget. The SEC has 4,200 staff and $2.149 billion. The CFTC’s workforce shrank from 708 employees in fiscal 2024 to 556 by fiscal 2025, a 21.5% decline. The agency’s own Inspector General flagged digital asset regulation as its “top management and performance risk” for 2026. Supplemental funding of $150 million is authorized in the bill, but whether that money arrives in time or at sufficient scale is an open question.
What actually changes if it dies
Failure is not a neutral outcome. It is an active deterioration of the regulatory landscape.
The SEC is already building its own framework. On August 18, the Commission voted on Regulation Crypto Assets, a 400-page rulemaking creating three pathways for token offerings: a startup exemption for raises up to $5 million, a fundraising exemption permitting up to $75 million annually with audited financials, and an investment contract safe harbor for sufficiently decentralized tokens. Chairman Atkins framed it as the centerpiece of “Project Crypto,” the SEC’s initiative to regulate digital assets through agency rulemaking rather than legislation.
The difference between a statute and a rule matters. A future hostile SEC commission can reverse an administrative rule through a rulemaking reopening. Legislation requires Congress to act. The industry that spent $189 million on the 2026 election cycle, according to Public Citizen, understands that distinction. Fairshake, the leading crypto super PAC, deployed more than $82 million. Coinbase directed $35.2 million through affiliated political committees. Ripple Labs contributed roughly $49 million.
Investment bank Bernstein projects a 10 to 25% near-term correction in Bitcoin if the bill fails, potentially testing the $55,000 to $60,000 range. Altcoins face steeper drawdowns of 15 to 30%. The institutional capital pipeline would constrict. TD Cowen’s analysis suggests the bill could pass in 2027 under a lame-duck scenario, with final rules not taking effect until 2029.
Without the Clarity Act, the crypto industry gets regulation by enforcement, a fragmented patchwork of overlapping rules from the SEC, CFTC, OCC, Treasury, and FASB. The bill designed to provide clarity would, through its failure, produce the opposite.
What to watch
The September 15 cloture vote at 2:15 p.m. ET is the singular inflection point. Sixty votes advances the bill to floor debate. Fifty-nine or fewer effectively kills comprehensive crypto legislation until 2029.
Movement from the seven-senator Democratic bloc between September 14 and September 15 will reveal whether backroom negotiations produced an ethics compromise during the recess. Watch for statements from Warner, Gillibrand, and Warnock in particular.
Polymarket odds and Galaxy Digital probability estimates heading into September 15 will serve as real-time sentiment gauges for whether institutional traders believe the vote will succeed. Current odds sit near 16%.
Banking lobby statements on stablecoin yield in the days before the vote will signal whether the American Bankers Association has softened its opposition or doubled down, a factor that directly influences the three to five senators who cited deposit flight concerns.
House calendar changes after September 17 will determine whether an amended Senate bill can reach a floor vote before the post-election lame-duck session, a timeline that transforms the legislative process from weeks to months.
What is the CLARITY Act?
The Digital Asset Market Clarity Act, or H.R. 3633, is proposed federal legislation that creates a regulatory framework for digital assets by splitting oversight between the SEC and the CFTC. The SEC would keep authority over securities and investment contracts. The CFTC would gain exclusive jurisdiction over digital commodity spot markets. The bill passed the House 294 to 134 in July 2025 and cleared the Senate Banking Committee 15 to 9 in May 2026.
What happens on September 15?
The Senate holds a cloture vote on the motion to proceed to the Clarity Act at 2:15 p.m. ET. This procedural vote requires 60 senators to agree to advance the bill to full floor debate. It is not a final passage vote, but failure at this stage would effectively end the bill for 2026 and likely until 2029 given the midterm election calendar.
Why does the Clarity Act need 60 votes?
Senate rules require a 60-vote supermajority to invoke cloture and end debate on most legislation. Without 60 votes, the bill stays subject to filibuster and cannot reach a final up-or-down vote. Republicans hold 53 seats, so they need at least seven Democrats, and expected GOP defections raise that number to 10 or more.
What is the ethics provision and why is it controversial?
The current draft includes a conflict-of-interest clause that bars senior officials and their spouses from issuing or sponsoring digital assets. Democrats argue the language is full of loopholes that would not prevent President Trump, who reported $1.4 billion in crypto income in 2025, from continuing to profit from crypto ventures. The provision also puts enforcement in the hands of Acting Attorney General Todd Blanche, a Trump ally, and sunsets when Trump leaves office in 2029.
What does Section 604 do for DeFi developers?
Section 604 exempts non-custodial software developers from money-transmitter registration and Bank Secrecy Act obligations. If a developer writes open-source code and never takes custody of user funds, that developer is not personally liable for how others use the code. Law enforcement groups oppose this provision, calling it a compliance-free lane for illicit finance.
How does the stablecoin yield provision work?
The bill bans stablecoin yield that functions like bank deposit interest but permits rewards tied to activities such as transactions, payments, and liquidity provision. A coalition of 78 banking groups wants tighter language, arguing the current standard is easy to engineer around. Coinbase generates roughly $1.35 billion annually from USDC rewards programs that the provision would legalize.
What happens to crypto if the bill fails?
The SEC, CFTC, OCC, and FASB are already advancing independent rulemaking. Regulation Crypto Assets, proposed by the SEC on August 18, offers partial clarity through agency rules. Those rules lack the permanence of legislation and can be reversed by future administrations. Analysts project a 10 to 25% near-term Bitcoin correction and delayed institutional capital deployment until at least 2029.
Who are the key senators to watch?
On the Republican side, watch Rand Paul (firm no), Josh Hawley (firm no), and Thom Tillis (conditional). On the Democratic side, the seven-member bloc of Warner, Cortez Masto, Warnock, Booker, Hickenlooper, Gallego, and Alsobrooks will determine whether 60 votes are reachable. Gillibrand has separately drawn a hard line on ethics enforcement.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions. Published Sept. 4, 2026.
The stablecoin giant launches Arc mainnet on September 16 with BlackRock, DTCC, and Visa as validators, betting that owning the infrastructure matters more than owning the dollar.
Summary
- Circle launches Arc, a USDC-native Layer 1 blockchain, on September 16, one day after the Senate votes on the CLARITY Act, the most consequential piece of crypto legislation since the GENIUS Act.
- Eleven founding validators include BlackRock, DTCC, Visa, Mastercard, ICE, Standard Chartered, and Galaxy, making Arc the most institutionally backed genesis cohort in blockchain history.
- The ARC token presale raised $222 million at a $3 billion fully diluted valuation, led by a16z crypto with participation from BlackRock, Apollo, and ARK Invest.
- DTCC will tokenize DTC-custodied assets on Arc starting in 2027, and BlackRock will deploy its $2.87 billion BUIDL fund natively on the network.
- Arc runs on Malachite, a Tendermint-derived BFT consensus engine delivering sub-500-millisecond finality, with an EVM-compatible execution layer built on Reth and gas fees denominated in USDC.
The timing is either brilliant or reckless. Circle will flip the switch on Arc mainnet on September 16, 2026, exactly one day after the U.S. Senate holds a cloture vote on the CLARITY Act. If the bill clears its 60-vote threshold, Arc launches into a market with freshly codified stablecoin rules that Circle helped write. If the bill fails, Arc launches anyway, into regulatory ambiguity that could last years.
Either way, the stablecoin company that spent a decade convincing Wall Street to trust USDC is now asking that same Wall Street to run its blockchain nodes. And Wall Street said yes.
Circle CEO Jeremy Allaire called Arc “a bigger opportunity than USDC” during the company’s Q2 2026 earnings call, where he described it as “the birth of a new operating system layer for economic activity in the world.” That is not the language of a company hedging its bets. That is the language of a company that believes stablecoin issuance was just the opening act.
Why a stablecoin company needs its own chain
The short answer: margins. Circle made $701 million in revenue last quarter, but most of that came from reserve income on the Treasury bills backing USDC. When interest rates drop, that revenue drops with it. A blockchain generates transaction fees regardless of the rate environment.
The longer answer involves a structural problem that has plagued USDC since its inception. Circle issues the dollar. Ethereum, Solana, Base, and a dozen other networks move it. Every time a USDC transaction settles on Ethereum, Circle captures zero value from that settlement. The gas fee goes to ETH stakers. The MEV goes to searchers. Circle gets nothing except the float on the underlying reserves.
Arc changes that equation. On Arc, USDC is the native gas token. Every transaction fee is denominated in dollars, not in a volatile network asset. And the ARC token, which Circle holds 25% of at genesis, accrues value through validator rewards and token burns. Circle is no longer just the issuer. It is the infrastructure.
This is the vertical integration play that crypto purists have been warning about for years. And it is happening.
The validator list that changed the conversation
When Circle announced its founding validator cohort on August 5, the reaction split cleanly down ideological lines. Crypto-native builders saw a consortium chain dressed in decentralization language. Traditional finance executives saw the most credible launch network since Visa joined Solana.
The eleven founding validators: BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation, and Visa.
Read that list again. DTCC clears and settles the vast majority of U.S. securities transactions. ICE owns the New York Stock Exchange. BlackRock manages over $11 trillion in assets. These are not speculative crypto funds looking for yield. These are the institutions that already run the traditional financial system, and they are now running nodes on a blockchain built by a stablecoin company.
The DTCC partnership alone deserves its own paragraph. Starting in the second half of 2027, DTCC will tokenize DTC-custodied assets on Arc, covering tokenized repo, collateral mobility, and corporate actions. Those tokenized assets will carry the same protections, rights, and safeguards that investors receive with traditionally held securities. This is not a pilot. This is DTCC committing its roadmap to a specific chain.
BlackRock plans to deploy its BUIDL fund on Arc, the tokenized Treasury product that has already crossed $2.87 billion in assets. Institutional investors will be able to subscribe, redeem, and deploy fund assets within a single on-chain environment using native USDC. No bridging. No wrapped tokens. No off-ramp friction.
Inside the machine: how Arc actually works
Arc is not a rebadged Ethereum fork. It borrows from Ethereum where borrowing makes sense, and it diverges where Circle decided institutions need something different.
The consensus layer runs Malachite, built by the team that joined Circle from Informal Systems. Informal was the company behind much of the original Tendermint and IBC work in the Cosmos ecosystem, which means Arc’s consensus engine carries serious BFT pedigree. Malachite delivers deterministic finality in under 500 milliseconds. That is not probabilistic finality like Ethereum. A transaction on Arc is final when the block closes. Period.
The execution layer is built on Reth, the Rust-based Ethereum client. This gives developers a familiar EVM-compatible environment. Solidity, Foundry, Hardhat, and existing Ethereum tooling all work on Arc out of the box. Developers can port contracts without rewriting them.
The fee model takes EIP-1559 as a starting point but replaces block-level fee adjustments with a weighted moving average of network demand. The result is fees that stay low and predictable in dollar terms, because they are literally denominated in dollars. No more guessing whether a transaction will cost $0.50 or $50 based on network congestion.
Arc also ships with a privacy layer that can hide transfer amounts when needed, a feature aimed squarely at institutional users who cannot broadcast their trading activity on a public ledger.
During Q2 2026, Circle reported that the Arc testnet had processed more than half a billion transactions across nearly 3 million wallets. The private mainnet is already running with over 100 institutional and ecosystem participants.
The $3 billion bet and the token question
In May, Circle closed a $222 million presale for the ARC token at a $3 billion fully diluted valuation. The round placed 740 million tokens at $0.30 each, roughly 7.4% of the 10 billion initial supply.
The investor list reads like a who’s who of institutional crypto capital: a16z crypto led the round, with BlackRock, Apollo Funds, ARK Invest, General Catalyst, Haun Ventures, Intercontinental Exchange, IDG Capital, Janus Henderson, Marshall Wace, SBI Group, and Standard Chartered Ventures all participating.
Token allocation breaks into three buckets. About 60% goes to the ecosystem for developers, grants, and network growth. Circle retains 25% for development, staking, and governance. The remaining 15% sits in a long-term reserve for market stability.
The dual-token model is the part that makes some observers uncomfortable. USDC handles gas fees and settlement. ARC handles staking, governance, and validator rewards. Circle earns revenue from both sides of that equation. It collects float on USDC reserves. It earns staking income and fee revenue from its 25% ARC stake. It charges for enterprise integrations. The revenue guidance jump tells the story: Circle doubled its “other revenue” forecast to $310 million to $330 million for full-year 2026, up from $150 million to $170 million, largely on the strength of Arc token presale proceeds and anticipated network fees.
CRCL stock responded by rallying past $72, though it remains roughly 10% below its 2026 high. The market is pricing in potential, not certainty.
The CLARITY Act factor
The September 15 cloture vote on the CLARITY Act is not a coincidence that Circle is ignoring. The bill, which passed the House in July 2025 and cleared the Senate Banking Committee 15-9 in May 2026, represents the most comprehensive attempt to regulate digital assets in U.S. history.
For Circle specifically, the CLARITY Act matters because it preserves the GENIUS Act framework that treats USDC as a regulated payment stablecoin. The bill text prohibits interest or yield on idle stablecoin balances while permitting activity-based rewards, a distinction that shapes how Arc’s fee model can operate.
If the CLARITY Act passes, Arc launches into a market where the rules are written and Circle’s compliance-first approach becomes a competitive moat. Every competitor that cut corners on regulation suddenly faces a choice: comply or lose institutional clients.
If the bill fails to reach 60 votes, the regulatory picture stays murky through at least 2027. Three fights remain unresolved: who enforces ethics rules tied to political officials with crypto interests, whether stablecoin rewards survive in their current form, and how far developer protections extend.
Circle has positioned Arc to work in either scenario. The validator cohort is designed to satisfy regulators before regulators even ask. A chain validated by DTCC, BlackRock, and Visa is a chain that any compliance department can approve without losing sleep.
Walled garden or open infrastructure
Here is the tension that will define Arc’s legacy, and possibly the next decade of crypto.
Critics like Adam Cochran call Arc a “consortium chain,” not a true blockchain. The validators are permissioned, chosen by Circle. In theory, they could reverse transactions. The governance model prioritizes institutional trust over censorship resistance. By every metric that matters to crypto’s original cypherpunk vision, Arc is a step backward.
Circle’s response is that this is precisely what institutions need. Known, vetted validators. Governance-based reversibility as a compliance feature. Dollar-denominated fees that CFOs can budget for. Privacy controls that satisfy trading desks. These are not bugs. These are the requirements that kept Wall Street off public blockchains for the past decade.
The deeper question is whether this model can coexist with permissionless networks or whether it inevitably replaces them. If DTCC settles securities on Arc and BlackRock deploys BUIDL there, does institutional money ever need to touch Ethereum again? And if it does not, what happens to the economic security model of chains that depend on institutional activity to justify their gas fees?
Tether is asking the same question from a different angle. It launched StableChain in December 2025, another stablecoin-native settlement network, though with less institutional firepower behind it. The stablecoin distribution war is no longer about which dollar token wins. It is about which dollar token owns the rails.
There is a plausible future where every major stablecoin issuer runs its own chain, each optimized for its own regulatory jurisdiction and institutional relationships. USDC on Arc for U.S. institutional settlement. USDT on StableChain for emerging market payments. Regional stablecoins on their own purpose-built networks. Ethereum and Solana become the interoperability layers between these walled gardens, not the primary settlement layers themselves.
That future would represent a profound shift from the permissionless vision that built this industry. It would also represent the most practical path to trillions of dollars in on-chain settlement volume.
What the stock market is pricing versus what the chain market needs
Circle went public as CRCL and trades near $72 as of early September. The stock is up from its post-IPO lows but still roughly 10% off its 2026 high. Wall Street analysts are split on whether Arc is a growth catalyst or a capital sinkhole.
The bull case is straightforward. Circle generated $701 million in Q2 revenue with $143 million in adjusted EBITDA at a 50% margin. USDC circulation hit $73.3 billion, up 19% year over year. On-chain USDC transaction volume reached $14.8 trillion in Q2, a 151% increase from the same period in 2025. If Arc captures even a fraction of that settlement volume with its own fee structure, the revenue upside is enormous.
The bear case is equally clear. Building and maintaining a Layer 1 blockchain is expensive. The $222 million token presale helps, but network effects are not guaranteed. Ethereum has a seven-year head start in developer tooling and DeFi composability. Solana has spent years building institutional relationships of its own. And the permissioned validator model could alienate the DeFi developers who drive the organic activity that makes any blockchain ecosystem sticky.
There is also the question of whether a publicly traded company should be running a blockchain at all. Every node operator decision, every governance vote, every token burn becomes a material event that requires SEC disclosure. The regulatory overhead of running a blockchain as a public company is unprecedented, because no public company has tried it at this scale before.
What to watch
CLARITY Act cloture vote on September 15: If the Senate reaches 60 votes, Arc launches into the clearest regulatory environment any blockchain has ever had. If it fails, watch for Circle to accelerate international validator recruitment as a hedge.
Arc mainnet transaction volume in the first 30 days: The testnet processed over 500 million transactions. Mainnet needs to show organic demand beyond validator testing to justify the $3 billion valuation.
DTCC tokenization timeline: The 2027 target for DTC-custodied asset tokenization is the single most important milestone for Arc’s institutional thesis. Any acceleration or delay will move CRCL stock.
BUIDL deployment on Arc: BlackRock bringing its $2.87 billion tokenized Treasury fund to Arc would represent the largest single asset deployment on a new chain since Ethereum launched.
Ethereum’s response: If Ethereum core developers or the Ethereum Foundation announce institutional settlement features in response to Arc, it signals that the competitive threat is real. Silence would be more telling.
What is Circle Arc?
Arc is a Layer 1 blockchain built by Circle, the company behind USDC. It uses USDC as its native gas token, runs on a Tendermint-derived consensus engine called Malachite, and is designed for institutional settlement and stablecoin finance. Public mainnet launches September 16, 2026.
Who are the Arc validators?
Eleven founding validators will run the network at launch: BlackRock, DTCC, Galaxy, Global Payments, ICE (parent of the NYSE), Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation, and Visa. These are permissioned validators chosen by Circle, not open to anyone.
What is the ARC token and how does it work?
ARC is the network’s staking and governance token, separate from USDC which handles gas fees. Total initial supply is 10 billion tokens. Circle holds 25%, 60% goes to ecosystem development, and 15% sits in a long-term reserve. The presale priced ARC at $0.30, valuing the network at $3 billion.
How fast is the Arc blockchain?
Arc delivers deterministic finality in under 500 milliseconds, meaning transactions are fully confirmed when the block closes. This is faster than Ethereum’s probabilistic finality and competitive with Solana’s speed, though Arc prioritizes settlement certainty over raw throughput.
Is Arc decentralized?
That depends on your definition. Arc launches with permissioned validators, all chosen by Circle. The roadmap calls for a shift from proof-of-authority to proof-of-stake over time, which would open validator participation. Critics call it a consortium chain. Circle calls it the compliance model institutions require.
How does the CLARITY Act affect Arc?
The CLARITY Act cloture vote happens on September 15, one day before Arc mainnet. If the bill passes, it codifies the GENIUS Act’s stablecoin framework and creates clear rules for digital asset classification. Circle has built Arc to be compliant under either outcome, but passage would give USDC and Arc a regulatory advantage over less compliant competitors.
Can developers build on Arc using Ethereum tools?
Yes. Arc’s execution layer is built on Reth and is fully EVM-compatible. Solidity smart contracts, Foundry, Hardhat, and other Ethereum development tools work on Arc without modification. Developers can port existing Ethereum contracts directly.
How does Arc compete with Ethereum and Solana?
Arc is not trying to replace Ethereum or Solana as general-purpose platforms. It targets a specific niche: institutional stablecoin settlement. Its advantages in that niche are dollar-denominated fees, sub-second finality, regulatory-compliant validators, and native USDC integration. Its disadvantage is a much smaller developer ecosystem and no existing DeFi composability.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments carry significant risks. Always conduct your own research before making investment decisions. Published Sept. 4, 2026.
Crypto’s August rebound has shifted attention away from the sector’s AI-era pivot and back toward balance-sheet and settlement plays. Bitcoin-linked exposure is again paying off for miners and corporate treasuries, while traditional finance is moving in parallel—planning stablecoin infrastructure aimed at cross-border payments.
At the same time, accumulation strategies are pushing into new concentration milestones. Bitmine’s long Ether buying streak is nearing its own goal of owning 5% of Ethereum’s circulating supply, even as the firm remains deeply underwater on unrealized gains.
Key takeaways
- Bitcoin’s late-August rally lifted mining stocks sharply, reversing a period when AI and high-performance computing narratives were outperforming.
- Strive and Strategy both added large amounts of Bitcoin to their treasuries in the final week of August, reinforcing the “buy-the-ticker” corporate approach.
- A consortium of 21 major financial institutions plans to launch a G7 stablecoin venture in 2027, starting with a US dollar-denominated product.
- Bitmine’s 65-week Ether buying streak has brought it close to owning 5% of Ethereum’s circulating supply, despite significant unrealized losses.
Why Bitcoin’s rebound pulled miners back into focus
Bitcoin’s August rally had an outsized effect on mining equities. According to BlocksBridge Consulting, Bitcoin rose about 23% in late August, and that move outpaced performance among many AI-linked infrastructure stocks. BlocksBridge reported that Canaan, American Bitcoin, and Cango gained roughly between 41% and 67%, while several AI-exposed names were less responsive—CoreWeave gained about 21%, Nebius about 17%, and IREN about 15%.
The relative swing matters because it suggests the market is once again willing to treat miners primarily as leveraged exposure to Bitcoin rather than as diversified AI infrastructure plays. BlocksBridge linked the move to three catalysts: expanded US Treasury liquidity-supporting buybacks, regulatory optimism following a White House crypto meeting, and a short squeeze that liquidated more than $1.6 billion in positions.
Still, the re-pricing comes with a familiar caveat. Miners face high capital intensity—especially where AI and data-center build-outs are concerned. Investors may be rewarding BTC beta in the short run, but the longer-term question is whether those AI-capex plans can be scaled economically through cycles, not just during recoveries.
For context on how sentiment changed, earlier coverage from Cointelegraph noted the broader “AI pivot” narrative among miners and how the late-August rally disrupted that preference. The current pattern reinforces that crypto equity performance remains tightly coupled to BTC market conditions.
Corporate treasuries add BTC again: Strive and Strategy’s purchases
While miners re-embraced Bitcoin sensitivity, corporate buyers also returned to the market. In the final week of August, Strive and Strategy each increased their holdings of Bitcoin through large block purchases, according to earlier Cointelegraph reporting on their respective acquisitions (links included in the source material).
Strive bought 1,800 BTC for approximately $143 million between Aug. 24 and Aug. 28, pushing its holdings to 23,156 BTC. The company reportedly paid an average of $79,431 per BTC (including fees and expenses). In the prior week, Strive had purchased 1,110 BTC at an average price of $73,409—suggesting the company continued to buy even as prices increased.
Strategy, meanwhile, resumed acquisitions and reportedly added 4,603 BTC at an average price of $80,318. Those buys lifted its holdings to above 845,000 BTC after four sales since May.
Cointelegraph’s source material also ties these purchases to a broader digital asset recovery that began Aug. 19, after the US Treasury announced plans to double certain long-term bond buybacks. In practice, this underscores how traditional macro liquidity expectations can quickly flow through to risk assets, prompting both equities and corporate treasuries to lean back into crypto exposure.
A stablecoin push aimed at 2027 goes beyond retail hype
Beyond Bitcoin-specific demand, mainstream finance is continuing to build stablecoin plans with a focus on institutional settlement. A consortium of 21 major financial institutions—including Bank of America, Goldman Sachs, and Citi—intends to establish a new company to develop and issue stablecoins, according to earlier Cointelegraph coverage of the initiative.
The venture is designed to launch a US dollar-denominated stablecoin in the first half of 2027, with an expansion to other G7 currencies afterward. The next planned rollout would reportedly be a euro-denominated offering. The stablecoin is intended to serve wholesale, institutional, and retail markets for cross-border payments and digital asset settlement.
The consortium also appears to be positioning the project for regulatory compliance. The source material states that the group plans to align with the US GENIUS Act and the EU’s MiCA regulation, building on an earlier October initiative in which 10 banks explored a 1:1 reserve-backed model using public blockchains.
What’s notable for investors and builders is the shift from isolated pilots to a coordinated, multi-institution structure. Even if timelines move, the direction is clear: stablecoin rails are being treated as part of payments infrastructure rather than a speculative side industry.
Bitmine nears a 5% Ether concentration target—after 65 weeks
Ether accumulation is continuing at a pace that brings Bitmine closer to a major supply-concentration milestone. Bitmine extended its ETH buying streak to 65 consecutive weeks by adding 53,501 ETH, as described in earlier Cointelegraph coverage of the firm’s accumulation track.
The latest purchase reportedly brings Bitmine’s holdings to more than 5.9 million ETH. Based on an ETH price of $2,511 as of Sunday (as cited in the source material), those holdings were valued at roughly $14.8 billion. The company’s position is described as 4.9% of Ethereum’s 120.7 million circulating supply, placing it near its stated 5% goal.
Bitmine chairman Tom Lee said Ether, Bitcoin, and Solana have been the three best-performing major assets since June 30, with ETH leading gains. In the same remarks, Lee argued that outperformance versus other macro assets could encourage institutions to add to crypto holdings.
However, the concentration story comes with a sobering balance-sheet reality: DropsTab data cited in the source material indicates Bitmine is still sitting on about $5.1 billion in unrealized losses on its Ether holdings. That figure reflects continued buying through the downturn that began in late 2022, not a strategy that depends on an immediate price recovery.
For market participants, this creates an asymmetry worth watching. Concentration can strengthen influence over liquidity and market optics, but it also means that investor confidence may ultimately hinge on how quickly—or slowly—unrealized losses convert back into gains during future drawdowns.
Across these developments, the next thing readers should watch is whether the market’s renewed preference for BTC-linked exposure persists beyond the August rebound—while stablecoin plans in 2027 advance from framework discussions into concrete licensing, reserves, and issuance mechanics, and Ether accumulators like Bitmine approach (or revise) their 5% supply target.
Compromised keys, not broken code, now drive the majority of crypto theft, and North Korea is cashing the checks.
Summary
- DeFi protocols have lost at least $1.3 billion to exploits in the first eight months of 2026, according to Forbes and CertiK, with compromised private keys overtaking smart contract bugs as the leading attack vector for the first time on record.
- Drift Protocol lost $285 million on April 1 after attackers spent months social engineering their way to an admin key, then drained the protocol in 128 seconds. KelpDAO lost $290 million 17 days later through a single compromised verifier on its LayerZero bridge.
- North Korea’s Lazarus Group (operating as TraderTraitor) has been attributed to at least $575 million of 2026 losses across the Drift and KelpDAO hacks alone, meaning a single state actor accounts for roughly 44% of the year’s total.
- Bridge infrastructure remains the dominant failure point. AFX Trade ($24.15 million), VerusCoin ($19.14 million across two exploits), and the Cosmos EVM underflow chain ($20.8 million across MANTRA, TAC, and KiiChain) all involved cross-chain verification layers that broke in the same predictable way.
- The Coldcard hardware wallet exploit ($130 million, July 30) proved that the compromised key problem extends beyond DeFi protocols. A firmware bug made seeds guessable, and attackers brute-forced their way into thousands of wallets without touching a single network.
Eight months into the year, and the crypto industry has already replayed the same failure mode enough times to fill a textbook. The attack surface has not changed. Protocols keep trusting a small number of keys, signers, and verification nodes, and attackers keep finding that it is cheaper to compromise one person than to break one smart contract.
The numbers are stark. CertiK’s Hack3d H1 2026 report and Forbes both put total crypto hack losses at $1.3 billion through the first half of the year. TRM Labs arrived at a similar figure, noting that losses were trending just below the $1 billion mark for DeFi alone. The rekt.news leaderboard, which tracks individual exploits above $3 million, lists more than 30 incidents from 2026 so far, with the top two alone accounting for $575 million.
What separates 2026 from prior years is not the dollar amount. It is the attack taxonomy. The year’s biggest thefts did not exploit reentrancy bugs, flash loan loops, or oracle manipulation. They exploited people. Social engineering, session hijacking, validator key theft, and governance capture now drive the majority of losses by dollar value. The code passed every audit. The humans around it did not.
Two hacks, one playbook, $575 million gone
The year’s defining moment happened in an 18-day window between April 1 and April 18.
On April 1, attackers drained Drift Protocol of $285 million in 128 seconds. Drift was Solana’s largest perpetuals exchange. The exploit did not touch a single line of smart contract logic. The attackers had spent months posing as a quantitative trading firm, attending conferences, meeting Drift contributors in person across multiple countries, and building the kind of trust that this industry runs on.
By the time they struck, they had obtained pre-signed authority from Drift’s Security Council using a durable nonce, a legitimate Solana feature. They whitelisted a worthless token called CVT, deposited 500 million of it as collateral against a fake oracle they had controlled for three weeks, and withdrew $285 million in USDC, SOL, and ETH.
Neodyme’s 2024 audit had flagged the exact mechanism. The report noted that admin instructions like InitializeSpotMarket accepted an oracle account with zero validation. It was rated informational, reasoning that only the admin could call it. Two years later, the admin key was in the wrong hands, and the informational finding became a nine-figure exit.
Seventeen days later, on April 18, KelpDAO lost $290 million through its LayerZero bridge. The method was entirely different. No conference circuit, no fake trading desk. Someone social-engineered a LayerZero Labs developer on March 6, lifted their session keys, and used that access to poison the RPC infrastructure feeding LayerZero’s verifier network. External nodes were DDoS-ed into silence. The remaining compromised nodes signed off on a forged cross-chain message, and the bridge minted 116,500 unbacked rsETH.
The stolen rsETH went straight into Aave as collateral, borrowed real WETH against itself, and moved out before the emergency multisig had assembled enough signatures to pause. Aave’s total value locked dropped $6.28 billion in 48 hours. Nine protocols froze markets. Arbitrum’s Security Council used emergency powers to seize 30,766 ETH from the attacker’s wallet on-chain, a move that split opinion almost as much as the exploit itself.
Both hacks passed their audits. Both teams had followed standard security practices. Both lost everything to a single compromised key.
The Lazarus assembly line
Investigators linked both Drift and KelpDAO to TraderTraitor, a subgroup of North Korea’s Lazarus Group. Mandiant, CrowdStrike, Elliptic, and LayerZero jointly confirmed the KelpDAO attribution. Elliptic tied Drift to the same unit with medium-high confidence.
This is not new. Lazarus was behind the $1.5 billion Bybit hack in February 2025, identified by on-chain investigator ZachXBT within hours. Before that, the same group hit Radiant Capital, the Ronin Bridge, WazirX, and Harmony’s Horizon Bridge across 2022 through 2024. The U.S. Treasury, FBI, and CISA have all published joint advisories naming the group and its tactics.
What changed in 2026 is the sophistication of the social engineering layer. The Drift attackers built relationships over months. The KelpDAO attackers targeted a specific developer’s session credentials. In both cases, the initial breach happened through trust, not technology. The technical exploitation only began after the human layer was already compromised.
CertiK’s Ronghui Gu put it plainly in an interview with Forbes: “A protocol can pass a flawless code audit and still lose millions because of a compromised admin key.” That quote now reads more like a warning label than an observation.
Bybit has since sued North Korea, its intelligence agency, and the Lazarus Group in U.S. federal court, trying to recover assets from the $1.5 billion hack. The legal theory is novel, but it underscores how few options victims have when the attacker is a sovereign state.
The math is uncomfortable. Drift ($285 million) plus KelpDAO ($290 million) equals $575 million from a single threat actor in 18 days. Against a total 2026 loss figure of $1.3 billion, Lazarus accounts for at least 44% of all stolen funds. If you include the Bybit hack from late February 2025, the group’s rolling 18-month tally exceeds $2 billion.
Bridges keep breaking the same way
Bridges are crypto’s soft underbelly. They have been since the Ronin Bridge hack in 2022 ($624 million), the Wormhole hack ($326 million), and the Nomad hack ($190 million). Four years later, the pattern has not changed.
In 2026, bridge exploits include KelpDAO ($290 million, single-verifier compromise), AFX Trade ($24.15 million, five compromised validator signatures on an Arbitrum USDC bridge), and VerusCoin ($19.14 million across two separate exploits of the same Ethereum bridge in May and July). The Cosmos EVM underflow bug hit three chains in quick succession: MANTRA ($3.6 million), TAC ($7.5 million), and KiiChain ($9.7 million), all through the same cross-shard receipt replay vulnerability.
The common thread is verification. Bridges must confirm that a message or transaction on one chain is valid before executing it on another. That confirmation almost always relies on a small set of signers, validators, or oracle nodes. Compromise enough of them, and the bridge does exactly what it was designed to do: release funds on the destination chain against what it believes is a legitimate request from the source chain.
AFX Trade is a case study in how thin the margins are. On July 22, five compromised validator signatures cleared the two-thirds quorum on its Arbitrum bridge, draining $24.15 million in USDC. The attacker moved the funds to Ethereum, swapped for 12,467.5 ETH, and consolidated into a single wallet. All of this happened 49 days after AFX had proudly promoted a security audit from Zellic. That audit documented zero test coverage and left acknowledgments unfixed. The dispute window on the bridge was 200 seconds. It disputed nothing.
The VerusCoin Bridge was hit twice: $11.6 million in May, then $7.54 million in July. Same bridge, different gap in the same broken trust boundary. The second time, there was no statement, no bounty offer, no communication at all.
The fix is known but rarely applied. Multi-verifier configurations, where a bridge requires confirmation from multiple independent verification networks before releasing funds, would have stopped both the KelpDAO and AFX Trade exploits. LayerZero publicly blamed KelpDAO for running a single-verifier setup. KelpDAO fired back with Dune data showing 47% of all LayerZero OApp contracts, more than 1,200 of them, use the exact same configuration. Over two and a half years and eight documented integration conversations, KelpDAO says LayerZero reviewed its setup each time and raised no objections.
This is the real scandal. The fix exists. The infrastructure supports it. Almost nobody uses it.
Audits are checking the wrong surface
Rekt.news published an editorial in July 2026 titled “Wrong Attack Surface” that crystallized what the year’s exploits had been screaming: the biggest losses all passed their audits because auditors were checking the code, and the code was fine.
CredShields put it directly in their Drift post-mortem: the attack surface has moved “up the stack to governance, to signers, and to the people building the protocols themselves.”
Traditional smart contract audits review Solidity or Rust for reentrancy, overflow, and access control bugs. They do not review operational security practices, key management procedures, social engineering resilience, or the off-chain infrastructure that feeds data to on-chain contracts. The KelpDAO exploit happened in LayerZero’s RPC infrastructure, which sat outside every audit scope. The Drift exploit happened through social engineering that compromised an admin key, which no code audit is designed to catch.
The Coldcard exploit is the most extreme example. On July 30, 2026, attackers began draining Bitcoin wallets secured by Coldcard hardware devices. A firmware bug had swapped the hardware random number generator for a predictable software fallback, shrinking the entropy of wallet seeds to a brute-forceable range. No phishing, no malware, no stolen device. Attackers ran the math on their own machines, derived candidate addresses, matched them against the public blockchain, and extracted the private keys for free.
Galaxy Research traced the initial wave to 1,082.65 BTC stolen from 1,196 addresses in 41 minutes. By August 7, the high-confidence tally had grown to 1,596 BTC from roughly 7,300 addresses, with candidate-inclusive estimates pushing past 2,055 BTC, or roughly $130 million. More than 25 separate attack patterns were identified. At least 15 independent attackers exploited the same flaw.
Coinkite, the maker of Coldcard, issued a preliminary advisory the same day and CEO NVK posted a public apology. But a firmware update could not fix wallets whose seeds had already been generated with the broken entropy. Those seeds needed to be replaced entirely.
The Coldcard incident is not a DeFi hack in the traditional sense. It is something worse: proof that the compromised key problem runs deeper than protocol governance. Even users who did everything the self-custody playbook recommends, hardware wallet, offline signing, no third-party custody, lost funds because the key generation itself was flawed.
What actually fixes this
The boring answer is the correct one. The 2026 exploit pattern has three failure points, and each has a known mitigation that most protocols have not adopted.
Key management: Multi-party computation (MPC) wallets and hardware security modules (HSMs) with threshold signing eliminate the single-key risk that enabled the Drift hack. Timelock delays on admin actions, combined with on-chain monitoring that alerts when privileged transactions are queued, give security teams a window to respond. Drift’s 128-second drain worked because there was no delay between key compromise and fund extraction.
Bridge verification: Multi-verifier configurations, where two or more independent verification networks must agree before a bridge releases funds, are the direct answer to the KelpDAO single-verifier failure. LayerZero supports this natively. The fact that 47% of its applications still run single-verifier setups is a configuration problem, not a technology problem.
Operational security: No code audit can protect against social engineering. Protocols handling nine-figure TVL need dedicated operational security programs: hardware-enforced authentication for all privileged access, mandatory multi-signature requirements that cannot be bypassed by a single signer, and security training that treats social engineering as a primary threat vector.
The Cosmos EVM underflow bug offers a different lesson. Cosmos Labs had known about the bug since April 2026 but misjudged its severity. When it was finally exploited across MANTRA, TAC, and KiiChain in August, all three chains halted too late. The funds had already bridged out. Responsible disclosure only works if the recipients treat the disclosure with urgency.
Term Labs’ governance attack ($8.5 million, August 2026) points to another gap. Near-zero voter participation let one wallet seize control of the protocol’s vaults for minimal cost, bypassing the governance delay entirely. When nobody votes, governance is just another attack surface. Quorum requirements, vote-locking periods, and guardian mechanisms that can veto suspicious proposals during a review window are standard tools that Term Labs had not implemented.
What to watch
The second half of 2026 will determine whether the industry treats these failures as lessons or as tolerable costs of doing business. Five indicators will tell the story:
Multi-verifier adoption rate on LayerZero: If the percentage of single-verifier OApps drops meaningfully from 47% by year-end, the KelpDAO lesson landed. If it holds steady, expect a repeat.
Timelock adoption on admin keys: Watch for protocols above $100 million TVL implementing mandatory delays on privileged transactions. Drift’s 128-second drain should make this non-negotiable.
Lazarus Group attribution in new exploits: The U.S. Treasury, Chainalysis, and TRM Labs all track Lazarus activity. Any new attribution to TraderTraitor signals that the group’s social engineering pipeline remains operational.
Cosmos EVM patch adoption across IBC chains: The underflow bug hit three chains. Dozens more run the same codebase. The speed of patching across the Cosmos ecosystem will show whether cross-chain coordination has improved.
Insurance protocol payouts and capacity: On-chain insurance providers like Nexus Mutual and Sherlock absorbed significant claims in H1 2026. If underwriting capacity shrinks or premiums spike, it signals that the market is pricing in continued attacks at current levels.
How much has DeFi lost to hacks in 2026?
At least $1.3 billion through the first half of 2026, according to CertiK’s Hack3d report and Forbes. The rekt.news leaderboard lists more than 30 individual exploits above $3 million for the year, with the two largest, Drift Protocol ($285 million) and KelpDAO ($290 million), accounting for $575 million combined. The full-year figure will climb further once H2 losses are tallied.
What was the biggest DeFi hack of 2026?
KelpDAO lost approximately $290 million on April 18 when attackers compromised a LayerZero developer’s session keys, poisoned the RPC infrastructure feeding the bridge’s verifier network, and minted 116,500 unbacked rsETH. The stolen tokens were funneled into Aave as collateral, triggering a $6.28 billion TVL drop across the lending protocol and market freezes at nine separate DeFi platforms.
How did the Drift Protocol hack work?
Attackers posed as a quantitative trading firm and built trust with Drift Protocol contributors over several months through conferences and in-person meetings. They obtained pre-signed authority from Drift’s Security Council using a durable nonce, whitelisted a fake token called CVT with a self-controlled oracle, deposited it as collateral, and withdrew $285 million in 128 seconds. The exploit used only legitimate Solana features and admin permissions, not a code bug.
Is North Korea really behind most crypto hacks?
North Korea’s Lazarus Group, specifically its TraderTraitor subunit, has been attributed to at least $575 million in 2026 DeFi losses across the Drift Protocol and KelpDAO hacks. Combined with the $1.5 billion Bybit hack from February 2025, the group’s rolling 18-month tally exceeds $2 billion. Mandiant, CrowdStrike, Elliptic, the FBI, and the U.S. Treasury have all published attributions tying specific exploits to Lazarus operations.
Why do crypto bridges keep getting hacked?
Bridges depend on a small set of validators or verification nodes to confirm that a cross-chain message is real before releasing funds on the destination chain. Compromise enough of those signers, and the bridge follows its own rules, releasing funds against what it believes is a valid request. The KelpDAO exploit used one compromised verifier. The AFX Trade exploit used five. The underlying problem is that most bridges concentrate trust in too few parties, and many still run single-verifier configurations even when multi-verifier alternatives are available.
What is a compromised key attack?
A compromised key attack is when someone gains control of a private key, admin key, or signing authority that has privileged access to a protocol’s funds or configuration. In 2026, these attacks overtook smart contract exploits as the leading cause of DeFi losses by dollar value. The attacker does not need to find a code bug. They need to find a person, whether through social engineering, session hijacking, phishing, or insider access.
Can smart contract audits prevent these hacks?
No, at least not the kind of audits most protocols commission today. Traditional smart contract audits check code for bugs like reentrancy, overflow, and access control flaws. They do not cover key management practices, operational security, social engineering resilience, or off-chain infrastructure. The KelpDAO exploit happened in LayerZero’s RPC layer, outside every audit scope. The Drift exploit happened through months of social engineering. Both protocols had clean audits at the time of their exploits.
What is the Coldcard hack and how does it relate to DeFi security?
On July 30, 2026, attackers began draining Bitcoin from Coldcard hardware wallets after discovering a firmware bug that replaced the hardware random number generator with a predictable software fallback. Seeds became brute-forceable. Galaxy Research tracked at least $130 million in losses across thousands of wallets. The Coldcard hack is not a DeFi protocol exploit, but it proves the same point: when the key itself is compromised, no amount of on-chain security matters. The problem is not limited to smart contracts or bridges. It runs through the entire stack.
This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions. Information is accurate as of Sept. 4, 2026.
AMC Entertainment CEO Adam Aron has raised fresh concerns about Robinhood’s “tokenized stock” products, arguing that the offerings have no affiliation with AMC and that the company will ask its outside securities counsel to investigate the matter. In an X post on Friday, Aron called Robinhood’s tokenized AMC exposure “outrageous,” adding that Robinhood stock tokens are not registered under U.S. securities laws.
Aron also suggested the products may be restricted from being offered to U.S. investors and face additional limitations in other jurisdictions, including Canada, Switzerland, and the UK. The remarks add to an escalating pattern of scrutiny around tokenized stocks—blockchain-based instruments intended to track the value of traditional listed shares.
Key takeaways
- Adam Aron says Robinhood has “no affiliation” with AMC for its tokenized stock offering and is seeking a review by outside securities counsel.
- Aron characterizes Robinhood tokenized stock products as “outrageous” and says they are not registered under U.S. securities laws.
- The criticism also points to potential cross-border offering restrictions, naming Canada, Switzerland, and the UK.
- The dispute arrives amid broader industry tension over tokenized stock campaigns that have faced cancellations, including in connection with tokenized IPO access.
- Robinhood’s tokenized stock program has evolved from earlier tokenized debt structures to an Ethereum-layer 2 ecosystem centered on Robinhood Chain.
Aron questions Robinhood’s tokenized AMC exposure
Aron’s comments were direct: he told X users that Robinhood has no affiliation with AMC regarding the company’s tokenized stock offerings designed to provide economic exposure to AMC shares. He further stated that Robinhood will request an investigation from outside securities counsel.
While Aron’s post does not spell out specific legal or operational details beyond affiliation and registration concerns, it frames the issue as one of investor-facing legitimacy—both in terms of corporate relationship and compliance with U.S. securities regulations. He also noted that the offerings “may not be offered to US investors” and are subject to restrictions in multiple other countries.
Robinhood co-founder and CEO Vlad Tenev responded publicly on X by asking Aron to share his exact concerns regarding the tokenized offering. According to the reporting, Robinhood did not issue a separate public statement.
What “tokenized stocks” are—and why regulators and issuers are watching
Tokenized stock products are designed to deliver economic exposure to traditional equities using blockchain-based representations. In the case of Robinhood’s ecosystem, the company’s earlier “stock tokens” were launched as tokenized debt securities issued by Jersey-based Robinhood Assets and structured as ERC-20 tokens.
Aron’s criticism reflects a broader debate that has emerged across the tokenized asset market: who bears responsibility for compliance, and what level of legitimacy and disclosure is required when tokenized instruments are tied to the performance of well-known public companies. When issuers or executives claim a lack of affiliation, it can also raise questions about branding, marketing, and investor expectations—especially for retail audiences.
For investors, the key issue is practical: if a tokenized product is not clearly registered—or if jurisdictions treat it differently—then availability, settlement, and redemption pathways may not match what users assume from the “stock-like” wrapper.
Broader backlash linked to tokenized IPO campaigns
Aron’s comments arrive after another high-profile controversy involving tokenized stock offerings tied to IPO access. Earlier this year, major crypto exchanges reportedly canceled tokenized SpaceX IPO allocation campaigns and, in some cases, pointed to execution or delivery limitations tied to underlying asset transfer.
According to earlier reporting cited in the article, platforms including Bybit, Binance, Bitget Wallet, and MEXC canceled tokenized SpaceX IPO campaigns after SpaceX began trading on the Nasdaq. Several platforms attributed their decision to an inability to deliver the underlying assets associated with xStocks, which is described in the article as Kraken-owned.
That episode underscores a recurring vulnerability in tokenized equity narratives: even if tokenization is technically feasible, the compliance and mechanics of delivering the referenced securities—especially on time and in the correct jurisdiction—can determine whether such products remain viable. AMC’s situation may be distinct from IPO access arrangements, but it highlights the same underlying tension between “token-as-stock” marketing and real-world legal and settlement constraints.
Robinhood’s tokenization roadmap: from early tokens to Robinhood Chain
The article notes that Robinhood’s first generation of stock tokens launched in July 2026 as tokenized debt securities issued by Jersey-based Robinhood Assets, using ERC-20 tokens to represent economic exposure to underlying assets such as U.S. stocks and exchange-traded funds.
It also describes Robinhood’s subsequent push into infrastructure that can host tokenized assets. In February, Robinhood launched a public testnet for Robinhood Chain, an Ethereum layer-2 network built using Arbitrum technology. Later, in October 2025, Robinhood shared plans to tokenize nearly 500 U.S. stocks and ETFs on Arbitrum.
In July 2026, the article further points to coverage that Bernstein analysts raised their price target on Robinhood Markets, predicting that tokenized equities and prediction markets would drive growth in the next phase rather than traditional crypto trading.
Taken together, the roadmap illustrates why this dispute matters beyond AMC specifically. If tokenized assets are meant to become a durable product category for retail users, then questions about issuer affiliation, regulatory registration status, and jurisdictional availability can directly affect adoption, partner relationships, and—potentially—compliance strategy across the broader tokenization stack.
What to watch next
Aron says Robinhood will involve outside securities counsel, but the immediate uncertainty for market participants is what the investigation will conclude and whether Robinhood responds with clarifications about the legal basis for its tokenized stock products. Readers should also watch for how other issuers, regulators, and intermediaries react as tokenized equity offerings move from pilot phases toward wider deployment.
The Office of the Comptroller of the Currency granted OpenReserve preliminary conditional approval on Sept. 2 to organize a full-service insured national bank in Salt Lake City, Utah.
Summary
- OCC granted OpenReserve preliminary conditional approval to organize a full-service insured national bank in Utah.
- OpenReserve must raise at least $210 million and obtain deposit insurance before receiving final authorization.
- The proposed bank plans deposits, lending, digital asset custody, tokenized deposits and treasury payment services.
- A stablecoin subsidiary remains unfiled and future issuance must comply with the GENIUS Act fully.
- Preliminary approval expires unless capital arrives within twelve months and banking begins within eighteen months.
The approval does not allow OpenReserve Bank to begin banking operations. The company must satisfy the OCC’s capital, governance, security and compliance requirements before receiving final authorization.
OpenReserve plans a full-service national bank
OpenReserve applied for a national bank charter on April 13. Unlike limited-purpose national trust banks, its proposed institution would accept insured deposits and offer conventional lending alongside digital asset services.
The bank plans deposit products, commercial and retail lending, treasury management, payments and foreign correspondent banking. Its deposit products could include tokenized capabilities, according to the OCC’s eight-page decision.
OpenReserve also intends to provide digital asset custody through a subsidiary. Customers could use digital assets, including stablecoins, for cross-border remittances and other permitted payment activities.
The bank could receive transaction fees in cryptocurrency. It would generally need to convert those assets into fiat within one business day unless retaining them serves another permitted purpose, such as paying anticipated blockchain gas fees.
“OpenReserve Bank is our contribution to that tradition: durable financial infrastructure, built in the United States,” CEO Dee Choubey said.
The proposed services remain subject to final approval, product design, customer eligibility and operational readiness.
OCC requires $210 million before opening
The OCC requires OpenReserve to raise at least $210 million in initial paid-in capital after organizational and preopening expenses. The bank must maintain a tier-one leverage ratio of no less than 12% during its first three years.
OpenReserve must raise the capital within 12 months of conditional approval. It must begin banking operations within 18 months or the approval will expire, except in circumstances the OCC considers beyond the organizers’ control.
The company must apply for Federal Reserve Bank stock and obtain deposit insurance from the Federal Deposit Insurance Corporation. The charter application was submitted as a joint national bank and federal deposit insurance filing.
OpenReserve must notify the OCC at least 60 days before its proposed opening date. The regulator will then conduct a preopening examination covering operational readiness, governance, compliance and technology.
Stablecoin subsidiary requires a separate filing
OpenReserve plans to establish a wholly owned subsidiary for issuing, holding, converting and processing U.S. dollar-backed stablecoins. However, the OCC said an application for that subsidiary has not been filed.
Any stablecoin activities must comply with the GENIUS Act and its implementing regulations. The OCC retains sole discretion to determine whether OpenReserve’s structure and activities meet those requirements.
The bank must also give the regulator at least 60 days’ notice before materially changing its business plan. It cannot proceed with such a change until the OCC issues a written determination of no objection.
OpenReserve has described its planned onchain ledger and stablecoin infrastructure as supporting continuous settlement. These are intended capabilities, not services currently available to customers.
Security and compliance reviews come before launch
OpenReserve must establish programs covering the Bank Secrecy Act, sanctions compliance, credit risk and information security. It must also appoint an independent auditor and prepare financial statements under generally accepted accounting principles.
An independent reviewer must test the bank’s electronic platform, including protections against unauthorized access, malicious software and denial-of-service attacks. The OCC must also approve the final technology architecture and related risk-management plan.
OpenReserve announced seed backing from Andreessen Horowitz, Jump Capital, Coinbase Ventures, Wintermute Ventures and several other investors. It did not disclose the amount raised or confirm how much would count toward the $210 million requirement.
The decision arrives as more digital asset companies seek federal supervision. Crypto.news previously reported that the OCC listed 13 pending digital asset applications in August as Comptroller Jonathan Gould encouraged permissible crypto businesses to pursue national charters.
Most recent applicants have pursued limited-purpose trust charters. OpenReserve’s planned insured deposits and lending distinguish it from firms such as Crypto.com, whose proposed trust bank would focus on custody and settlement without accepting deposits or issuing traditional loans.
The OCC can modify, suspend or withdraw OpenReserve’s approval before opening. Final authorization depends on the company completing every preopening condition within the regulator’s deadlines.
The odds of a rate hike in September have fallen to 38% on Polymarket after Federal Reserve Governor Christopher Waller stated that his decision will depend on the upcoming August consumer price index (CPI) report.
Bitcoin (BTC) registered a sharp increase following Waller’s comments and reclaimed $80,000. The flagship cryptocurrency is up over 4%, trading around $81,271.
September Interest Rate Hike Odds Fall To 38%
Waller stated that cooler August inflation data could convince him to support holding interest rates steady at the upcoming Federal Reserve meeting. The Federal Reserve governor said inflation levels were moving toward the 2% goal, and employment was near its maximum sustainable level. However, Waller gave the CPI report more weight, stating that he does not expect the employment report figures to differ much from recent labor data.
Instead, he gave more weight to the August inflation report in deciding whether he will support keeping interest rates steady or increasing them from their present range.
“If there is continued progress toward our 2 percent goal, then I am willing to support holding the policy rate at its current level.”
Waller added he would consider supporting a hike if inflation numbers crept higher, adding that the Fed’s current policy stance gave the Fed some wiggle room as it only slightly restricted demand.
“If there is evidence that progress toward 2 percent inflation reversed in August, a small adjustment in our stance would help ensure that it resumes.”
Waller stated that explaining how the data could affect his decision allows investors, companies, and households to prepare for different policy outcomes. He supported the Fed’s decision to leave interest rates unchanged at the July policy meeting, explaining that the economy remained robust and showed early signs of disinflation.
Key Data Releases
The United States Bureau of Labor Statistics will release the August Producer Price Index (PPI) on September 10, and the Consumer Price Index on September 11, less than a week before the Fed’s decision on interest rates. The timing of the release gives policymakers a very small window to assess whether numbers continued easing in August.
The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 3.7% compared to the previous year and remains above the 2% target. The US-Iran conflict has added further uncertainty about upcoming data.
Federal Reserve Chair Kevin Warsh stated following the Jackson Hole meeting that inflation remained above the central bank’s target. CME FedWatch put the odds of a rate hike before Waller’s comments at 66%, after which the odds were revised to 50%.
Fed Officials Open To Rate Hike
However, Waller’s colleagues remain open to a September hike. Federal Reserve Governor Stephen Barr said in a September 1 speech that inflation had been higher than acceptable levels for over five years. Price growth fell from over 7% in 2022 to just over 2% in 2024, but stalled in 2025 as tariffs, the geopolitical situation in the Middle East, and AI spending pressured the economy.
According to Barr, Fed officials would act decisively and raise interest rates if they felt inflation remained high.
Federal Reserve officials were deeply divided over interest rates at the July FOMC meeting, with Beth Hammack, Neel Kashkari, and Lorie Logan favoring a 25-basis-point increase. Energy remains an area of concern for officials, with Brent crude climbing above $90 after renewed hostilities around the Strait of Hormuz, reigniting supply chain concerns. A jump in crude prices could have a domino effect on transport, production, and consumer costs.
Lower Odds Boost Bitcoin, Crypto
Odds of a rate hike rose to nearly 50% on Polymarket earlier in the week before falling to 38% following Waller’s comments. Meanwhile, expectations of no rate cuts following the upcoming meeting rose to 63%.
However, traders on Polymarket believe there will be at least one rate hike in 2026, with a separate contract putting that probability at 64%. Crypto investors will be watching any developments related to the decision on interest rates, which can affect demand through various avenues such as regulated investment products, Treasury yields, and the dollar.
Higher yields reduce demand for volatile assets like Bitcoin and increase it for interest-bearing money-market instruments and government debt.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Kalshi expanded its cryptocurrency derivatives lineup on Sept. 4 by launching perpetual contracts linked to BNB, Cardano, Worldcoin, Aave and Venice Token for eligible U.S. traders.
Summary
- Kalshi added perpetual contracts tied to BNB, ADA, WLD, AAVE and VVV for U.S. trading.
- The contracts use U.S. dollar margin, have no expiration and permit long or short positions.
- Maximum leverage varies by product, reaching 4.5 times for BNB and 1.9 times for VVV.
- Kalshi now offers Bitcoin and seventeen altcoin perpetuals, according to its current product listings online.
- The CFTC filing process does not necessarily represent an affirmative commission vote approving each contract.
The contracts are margined and settled in U.S. dollars. They allow traders to take long or short positions without a fixed expiration date. Maximum leverage differs by asset, with approximately 4.5 times available for BNB and 1.9 times for Venice Token, according to the platform’s product information.
The additions bring Kalshi’s lineup to Bitcoin and 17 altcoin perpetual contracts. Existing markets include Ether, XRP, Solana, Hyperliquid and Zcash.
Kalshi crypto perpetuals expand to five more assets
The five additions cover several areas of the crypto market. BNB is the native asset of BNB Chain, while ADA supports the Cardano network. AAVE is the governance token of the Aave lending protocol.
Worldcoin’s WLD and Venice Token’s VVV provide exposure to projects connected with artificial intelligence. However, the availability of a perpetual contract does not establish the value, security or regulatory classification of its underlying token.
Kalshi’s contracts provide price exposure without requiring traders to hold the underlying assets. Gains and losses instead depend on changes in each reference price and the trader’s chosen position.
Leverage can magnify returns, but it also increases liquidation risk. A relatively small adverse price movement may eliminate a leveraged position’s margin. Perpetual contracts can also carry recurring funding or adjustment costs intended to keep their prices close to spot markets.
CFTC filing does not remove the legal dispute
Kalshi operates as a CFTC-regulated designated contract market. The new products appeared after the platform submitted contract materials through the regulator’s public filing system.
However, describing every filing as a separate CFTC “approval” may overstate the regulator’s role. Registered exchanges can introduce some products through applicable certification or review procedures. A filing’s presence in the CFTC database does not always mean the full commission held an affirmative vote on that individual contract.
The legal treatment of crypto perpetuals also remains contested. CME Group sued the CFTC after the regulator authorized Kalshi’s Bitcoin perpetual contract and issued related regulatory relief for Coinbase.
CME argues that perpetual products should be treated as swaps rather than conventional futures. That classification would subject them to a different regulatory structure. For background, crypto.news previously examined the legal dispute over how perpetual contracts should be classified.
CFTC asks court to dismiss CME challenge
The CFTC moved to dismiss CME’s lawsuit on Sept. 2, arguing that CME lacks standing because it can offer comparable products through its own registered exchange.
“This lawsuit is much ado about nothing,” the regulator’s lawyers said in the court filing. That statement represents the CFTC’s legal position, not a court finding.
The agency argued that CME had not demonstrated a concrete financial injury caused by Kalshi’s contracts. CME maintains that the regulator’s approach bypassed requirements established for swaps. As crypto.news reported in related coverage of the dismissal motion, the court has not ruled on either the standing question or the products’ classification.
Kalshi previously introduced Bitcoin perpetuals after receiving CFTC authorization in May. It subsequently added contracts tied to XRP, Zcash, Dogecoin, Shiba Inu and other assets. Its earlier expansion into XRP perpetual futures also brought cash-settled, non-expiring exposure to U.S. users.
What happens next for Kalshi and CME
Kalshi can continue offering the newly listed contracts while meeting applicable CFTC rules and its exchange obligations. Traders will need to monitor leverage, margin requirements, reference prices and any contract-specific costs.
Further additions are possible. Filings involving other assets, including XLM, DOT and HBAR, were reportedly awaiting completion, but their launch dates were not confirmed at publication.
The more consequential event will be the federal court’s response to the CFTC dismissal motion. The agency requested oral argument, although no hearing date had appeared on the public docket when the motion was reported.
A dismissal would end CME’s current challenge without necessarily resolving every legal question surrounding perpetual futures. If the case proceeds, the court could examine whether the CFTC properly treated Kalshi’s products as futures rather than swaps.
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