Ripple CEO Brad Garlinghouse has cited an 86-tonne reallocation of Dutch gold reserves to argue that crypto networks can move value across borders faster than physical reserve systems.

Dutch gold transfer changed where reserves were held

De Nederlandsche Bank said it reallocated about 86 tonnes of gold between March and August 2026 to make its reserves easier to trade and strengthen its preparations for a possible crisis.

Most of the operation did not involve shipping the same bars across the Atlantic. According to the central bank’s announcement, DNB sold approximately 59 tonnes in New York before buying the same amount of market-standard gold in London.

DNB also used physical transfers for part of the operation. More than 27 tonnes were moved from the United States and Canada to its cash center in Zeist, while a similar amount of market-standard gold was transported from Zeist to London.

By combining sales, purchases, and physical transport, the central bank said it reduced the operational risks associated with relying on one transfer method. The approach also allowed DNB to avoid remelting bars that did not meet the standards required for direct trading in London.

No gold was added to or removed from the Dutch reserve during the process. Instead, the operation changed where the metal was held and improved the quality of the portion available for international transactions.

Following the reallocation, the Bank of England holds 32.1% of the Netherlands’ gold, up from 18.1%. DNB’s Zeist facility retains 30.8%, while New York and Ottawa each account for 18.5%.

Before the move, New York held 31.3%, and Ottawa held 19.7% of the reserve. DNB said London offers better access to the international gold market, particularly when financial conditions become volatile.

Brad Garlinghouse says crypto removes location barriers

Responding to the operation in an X post, Garlinghouse focused on how DNB transferred much of the reserve’s economic value without moving the same bars from New York to London.

The Ripple executive described global value transfer as an “ideal use case” for crypto, arguing that blockchain networks can settle transactions quickly and securely without requiring an asset to change physical locations. His comparison centered on the custody, transport, and trading arrangements needed when central banks reposition bullion.

“Why does financial value still depend on these location-centric processes?” Garlinghouse asked.

His argument did not mean that the Dutch central bank had used cryptocurrency or blockchain technology during the operation. DNB relied on established bullion markets, central-bank custody arrangements, and physical vault infrastructure to reorganize the reserve.

Garlinghouse instead used the transaction to contrast two different forms of settlement. Gold requires recognized vaults, approved bars, secure transport, and access to liquid trading centers, while a crypto asset can move between blockchain addresses without being transported as a physical object.

According to Garlinghouse, the total value of the crypto market has grown from approximately $1.5 billion in 2013 to around $2.7 trillion. He presented that increase as evidence that blockchain-based assets and transfer networks have developed into a large financial market within little more than a decade.

Ripple has built much of its business around institutional payments and settlement. In July, crypto.news reported on Ripple’s European expansion, noting that Ripple Payments had processed more than $100 billion across over 60 markets.

A separate June report examined how Ripple has moved from presenting itself as a direct replacement for bank infrastructure toward working alongside SWIFT. Banks can retain established messaging systems while using blockchain-based products for selected settlement and tokenization functions.

Germany’s gold transfer shows the physical burden

Garlinghouse also referred to Germany’s earlier repatriation of 674 tonnes of gold from Paris and New York to Frankfurt. The Bundesbank began the operation in 2013 and completed it in 2017, three years before its original deadline.

The total consisted of 374 tonnes from Paris and 300 tonnes from New York. Germany moved the metal in stages, bringing 37 tonnes to Frankfurt in 2013, 120 tonnes in 2014, 210 tonnes in 2015, 216 tonnes in 2016, and the final 91 tonnes in 2017.

Bundesbank specialists checked the authenticity, purity, and weight of the bars when they arrived in Frankfurt. After the program ended, Germany held 50.6% of its gold domestically, while the Federal Reserve Bank of New York stored 36.6% and the Bank of England held 12.8%.

The Bundesbank said its storage plan served two functions: maintaining confidence by keeping half of the reserve in Germany and preserving access to trading centers where gold could be exchanged for foreign currency quickly.

For U.S. readers, both the German and Dutch cases show the continuing role of New York in the international bullion system. Foreign central banks store gold at the Federal Reserve Bank of New York because the location supports custody and transactions with other official institutions, although moving or reallocating bullion still requires operational coordination.

Gold infrastructure remains central to reserve policy

Despite Garlinghouse’s comparison, DNB said the gold reallocation was designed to improve the resilience of its existing reserve system rather than replace bullion with a digital asset.

DNB Governor Olaf Sleijpen said the central bank does not expect that it will have to use its gold during a crisis. Even so, he said DNB must remain prepared for severe conditions and ensure that part of the reserve can be traded when needed.

The central bank also said experience with both physical transfers and market-based reallocations would be useful if another move became necessary. During a future disruption, transport constraints or trading conditions could prevent DNB from using one of the two methods.

The gold operation arrives as regulated institutions continue adding digital-asset services without abandoning existing financial infrastructure. In July, Germany’s DZ Bank began rolling out crypto trading through participating cooperative banks, giving retail customers access through their existing banking relationships.

The service supports Bitcoin, Ethereum, Litecoin, and Cardano, with Boerse Stuttgart Digital handling custody. Participation remains optional for individual cooperative banks, although hundreds of institutions were expected to introduce the service over time.

CZ says Bitcoin still faces established gold systems

Binance co-founder Changpeng Zhao has also compared Bitcoin with gold, although his assessment gave more weight to the infrastructure already built around the precious metal.

Speaking during a Bitcoin Asia fireside chat, Zhao said Bitcoin could eventually become more important than gold if governments begin treating it as a strategic reserve asset. He also acknowledged that gold benefits from mature systems for custody, valuation, and central-bank reserve management.

Gold’s place in official reserves has developed over many years, giving governments established rules and institutions for storing, auditing and trading the metal. Zhao said replacing that system could take time, particularly among large economies that already hold extensive bullion reserves.

National Bitcoin adoption has nevertheless entered official policy discussions in several countries. Zhao has advised governments on digital assets, including reserve-related initiatives, while continuing to argue that state adoption could influence Bitcoin’s long-term standing against gold.

The UK’s Financial Conduct Authority (FCA) is reportedly in discussions with prediction market operators about whether it could ease a long-standing restriction on offering retail access in the country. The move, if it happens, would mark a notable shift from the regulator’s position since 2019—when it placed a permanent ban on selling, marketing, or distributing certain “binary options” to retail customers.

According to a Friday report by The Times, the FCA has been weighing lifting the prohibition for UK-based retail investors. The decision would specifically affect platforms that run event-driven markets—including contracts tied to sports, politics, and weather—where payouts are binary in nature.

Key takeaways

• The FCA’s 2019 rules effectively barred prediction market platforms from marketing binary options to retail consumers in the UK.
• The Times reports the FCA is now considering loosening that retail ban.
• UK retail traders reportedly have used VPNs to access US-based platforms such as Kalshi and Polymarket despite UK restrictions.
• If the FCA reverses course, UK operators could face regulatory questions similar to ongoing disputes in the United States.

Why the FCA’s 2019 ban mattered

The FCA’s restriction dates to April 2019. In a statement at the time, the regulator said firms were “prohibited from selling, marketing or distributing binary options to retail consumers.” The FCA framed binary options as high-risk products that should not be offered to the mass retail public in their existing form.

As noted in the original FCA reasoning from the ban, “Binary options are gambling products dressed up as financial instruments,” according to comments attributed to the regulator at the time, including statements made by the FCA’s executive director of strategy and competition, Christopher Woolard.

Prediction market platforms—particularly those built around event contracts that resolve in yes/no outcomes—often rely on that “binary” structure, even when offered as a market rather than a traditional sportsbook. That similarity is what brought them under the FCA’s broader binary options prohibition.

Reported UK retail access pressure and the VPN workaround

The backdrop to any potential change appears to be persistent retail demand and workarounds. The Times report says many UK-based users have continued trading on platforms such as Kalshi and Polymarket by using virtual private networks (VPNs) to bypass restrictions.

This matters for regulators because it signals that outright prohibition has not eliminated participation. Instead, it has pushed activity into a less transparent channel, with users potentially exposed to the risks and consumer protections—or lack thereof—of jurisdictions outside the UK.

Industry expectations for growth have also helped keep the spotlight on prediction markets. In April, Bernstein Research speculated, as reported by CNBC, that the overall prediction market sector could climb to around $240 billion in trading volume in 2026 and about $1 trillion by 2030. While such forecasts are not regulatory decisions, they shape how seriously both markets and policymakers view the category’s trajectory.

CNBC relayed Bernstein’s projections in April, giving a sense of scale that can influence how regulators evaluate whether a ban is proportionate to real-world usage.

What would change if the ban is lifted?

If the FCA moves to lift the retail ban, the most immediate implication would be legal clarity for platforms that currently operate under constraints for UK retail participants. However, it would not automatically resolve the underlying classification debate around whether event contracts should be treated as “binary options” under UK rules—or whether a more tailored regulatory framework could distinguish prediction markets from conventional binary betting.

Even with a UK relaxation, platforms would likely need to demonstrate how their products function, how they handle consumer protections, and how they address the core concerns the FCA cited in 2019.

Importantly, any UK decision would also be watched in light of disputes in the United States. In the US, state regulators and courts have been grappling with where prediction markets fit within existing gambling and securities frameworks.

US legal battles could shape expectations in the UK

Should the FCA loosen restrictions, UK platforms could face pressure to align with— or at least anticipate— the outcomes of ongoing US enforcement. The source material points to a parallel problem: in multiple US states, gaming authorities have challenged prediction market platforms over sports event contracts.

Earlier coverage highlighted that New Jersey officials petitioned the Supreme Court last week to hear its case against Kalshi, potentially leading to clearer boundaries between state and federal authority over prediction markets. That development, reported by Cointelegraph, underscores how unresolved jurisdictional questions can drive uncertainty for platforms—even when they are operating commercially.

While the UK and US legal environments are not the same, regulatory bodies typically consider international enforcement trends when reassessing product classification and risk. For retail users, any UK shift could also reduce the incentive to use VPNs, if lawful access becomes possible under an FCA-approved structure.

For now, readers should watch for whether the FCA’s reported discussions lead to formal rule changes or guidance—and, just as importantly, whether the regulator’s approach focuses on redefining prediction markets, imposing new consumer safeguards, or simply carving out an exception for retail access. The practical impact will depend on how the FCA draws the line between event-driven prediction and what it considers retail “binary options.”

Harmony has told ONE holders to leave smart contracts by Sept. 10 because liquidity pools, multisig vaults and on-chain applications cannot move to Ethereum under its proposed network closure.

Harmony said users do not need to file a claim for replacement ONE tokens, but the automatic process only covers balances captured in the final blockchain snapshot.

The warning creates two different paths for holders. ONE kept in a standard wallet would be recorded and recreated on Ethereum, while tokens deposited into decentralized finance protocols may need to be withdrawn before the deadline.

Harmony has not disclosed when it will produce the final block or complete the airdrop. Sept. 10 is therefore an exit deadline for smart-contract users and the date from which validators may begin closing their nodes, not the confirmed date of the mainnet shutdown.

Why ONE holders must leave smart contracts

Under the proposal, Harmony would record ONE balances at the blockchain’s final block before issuing replacement tokens as ERC-20 assets on Ethereum. Covered balances include tokens in personal wallets, staking delegations, unclaimed validator rewards, and centralized exchange accounts.

The project said the new tokens would be sent to the same Ethereum-compatible addresses listed in the snapshot. Since Harmony uses addresses compatible with Ethereum’s format, holders would not need to complete a separate claim or submit personal information.

Smart contracts present a more complex problem. Although the snapshot can record how much ONE a contract holds, it cannot reproduce the full state, ownership rules, or functions of every application on Ethereum.

Liquidity pools may contain two or more assets and issue separate liquidity provider tokens representing each user’s share. Multisig vaults depend on contract rules that require several approved signers, while lending markets track collateral, loans, interest, and liquidation conditions. Harmony said such applications and positions cannot be copied automatically.

Users with funds in decentralized exchanges, lending services, or other Harmony applications must therefore interact with the relevant protocol and withdraw before Sept. 10. The project has not announced a separate recovery route for assets that remain locked in contracts after the deadline.

Removing liquidity may also require users to convert liquidity provider tokens back into their underlying assets. Any protocol-specific waiting period, withdrawal restriction, or unavailable interface could affect whether a user can complete the process before the cutoff.

Harmony has not published a complete list of affected applications. Holders will need to review their wallet activity and check whether any ONE or other tokens remain deposited in smart contracts rather than sitting directly at their addresses.

Exchange users will depend on platform support

ONE held on centralized exchanges is expected to qualify for the migration because Harmony plans to include exchange wallets in the final snapshot. The team said it would work with trading platforms to replace existing ONE balances and move listings to the ERC-20 version.

Individual customers would not control the migration process when an exchange holds their tokens. Each platform may set its own suspension schedule for deposits, withdrawals, and trading while it updates its wallet infrastructure.

Harmony has not named the exchanges supporting the move or released their operating schedules. Exchange users may need to monitor official notices to determine whether their platform will manage the conversion, require a withdrawal, or discontinue ONE trading.

Self-custody users face a different concern. The replacement tokens are supposed to arrive at the Ethereum address matching their Harmony wallet, so holders must retain access to the private key or recovery phrase controlling that address.

Sending tokens to another wallet before the snapshot would change which address receives the Ethereum allocation. Harmony has not yet announced the snapshot block, meaning users moving funds after leaving DeFi applications must continue tracking official updates.

The proposal would keep ONE’s total supply and issuance schedule unchanged. Harmony also plans to publish the Ethereum contract, snapshot calculations, and airdrop scripts for public review, although those materials were not available when the plan was announced.

As previously covered by crypto.news, the migration forms part of Harmony’s proposal to retire the Layer 1 network it launched in 2019. The team cited security threats from state-backed attackers and AI agents when explaining why it no longer wanted to operate an independent blockchain.

Validators can close nodes from Sept. 10

Validators may begin shutting down their nodes on Sept. 10 under a separate transition process. Harmony has allocated $1.372 million to compensate eligible validators and delegators, with payments scheduled over four quarterly installments.

Receiving compensation requires validators to stop their nodes within the stated period, sign an agreement, maintain their stakes, and continue working as governors. Harmony said the fund would also cover the difference between rewards earned at a validator’s last block and the network’s eventual final block.

Delegated ONE and unclaimed validator rewards would be placed into individual governor vaults rather than handled like ordinary wallet balances. The team has not explained how the $1.372 million will be divided or published the agreements that validators must sign.

Governors could later remain in the project’s decision-making structure or participate in Harmony’s proposed AI video business as operators or affiliates. Under the plan, future ONE issuance would support what the team calls a video “remix economy.”

Harmony said creators would publish prompts and other materials that users could modify, with AI agents producing additional video clips from each branch. Operators would manage video generation, distribution, and moderation, while staking and service uptime would affect their rewards.

The project has projected up to $1 million in combined operator revenue during the first year and plans to subsidize graphics-processing hardware. Harmony has also proposed a $10 monthly subscription and a recurring 30% commission for referred subscriptions, though neither figure represents confirmed revenue.

U.S. holders may need to preserve migration records

American holders may need records showing their original ONE purchases, withdrawals from Harmony applications, final snapshot balances, and receipt of the Ethereum tokens.

The IRS classifies digital assets as property and generally requires taxpayers to report sales, exchanges, and other disposals. Its digital asset guidance also requires taxpayers to answer a digital asset question on federal income tax returns.

Harmony describes the Ethereum asset as a replacement version of ONE with the same supply and emission rate. The IRS has not issued a decision on the tax treatment of this specific migration, leaving the result dependent on the transaction’s structure and each holder’s circumstances.

Closing a DeFi position before Sept. 10 could involve more than a wallet transfer. A user may need to exchange a liquidity provider token, repay a loan, remove collateral, or swap assets, and each action can create separate records relevant to U.S. reporting.

Exchange customers may receive transaction information through Form 1099-DA, where the reporting rules apply. The IRS states that taxpayers must still report taxable digital asset activity even when a broker does not issue the form.

Harmony deadline follows a disruptive August exploit

The deadline follows an August security incident in which attackers used a cross-shard verification flaw to create unauthorized ONE. Harmony’s later investigation found that more than 3 trillion tokens had been generated through six transactions.

One connected wallet attempted 534 transfers of 5 billion ONE within 106 seconds, according to the project’s reconstruction. Of that total, 477 transactions succeeded and moved 2.385 trillion tokens into wallets, exchanges, decentralized exchange routers, liquidity pools, bridges, and staking accounts.

Harmony initially proposed a two-shard blockchain rollback to checkpoints recorded at 11:25:37 p.m. UTC on Aug. 11. The plan would discard 141,628 shard 0 blocks containing 109,126 regular transactions and 315 staking transactions.

The network classified 104,545 of the regular transactions as automated activity, including almost 100,000 connected to decentralized exchange automation. Legitimate transactions completed after the checkpoints would also be removed under the rollback.

A separate staking flaw disclosed in December 2023 had previously created 146.28 million ONE across 74 delegator addresses. Harmony fixed that incident through an emergency hard fork at block 51,118,080.

In June 2022, attackers also stole about $100 million from Harmony’s Horizon Bridge after compromising keys controlling its multisig wallet. The project later revised its recovery plan after community opposition forced it to withdraw a proposal to mint 4.97 billion ONE for victim compensation.

Bitcoin has processed 893,391 transactions in one day, its fourth-highest daily total on record and a reading above the 99th percentile of its historical range.

Bitcoin transaction count enters its historical top four

Galaxy Research reported the milestone in a Sept. 7 post on X, placing the latest total among the most active days since Bitcoin began operating in 2009.

“Yesterday was the 4th largest daily transaction count in Bitcoin’s history,” the firm said.

At 893,391, the count also exceeded 99% of all daily readings recorded by the network, according to Galaxy’s data. The research firm did not identify a single event, application, or group of users responsible for the increase.

Yesterday was the 4th largest daily transaction count in Bitcoin’s history. The daily transaction count of 893,391 is above the 99th percentile of its historical range. pic.twitter.com/ROm8TYgXwK

— Galaxy Research (@glxyresearch) September 7, 2026

YCharts recorded the same total and showed that daily transactions had risen from 723,854, representing an increase of about 23.4% in 24 hours. Compared with 441,035 transactions on the corresponding day a year earlier, activity had climbed by approximately 102.6%.

The increase extends a recovery that was already visible earlier in 2026. Data based on Blockchair showed that Bitcoin processed 862,979 transactions on June 23, which ranked as the third-highest daily total at the time.

June’s average reached 651,655 transactions per day, up 90% from the 342,866 average reported for June 2025. Bitcoin’s median daily count had fallen to 417,151 during 2025, an 18% drop from the 508,934 median registered in 2024.

Earlier Blockchair figures placed April 23, 2024, at 927,010 transactions and Sept. 8, 2024, at 910,083. Galaxy’s updated fourth-place ranking for the 893,391 reading indicates that another session has since entered the top three.

Small Bitcoin transfers have driven much of the increase

Research from CryptoQuant has linked much of Bitcoin’s 2026 transaction growth to small transfers rather than a matching rise in the value moved across the network.

Transfers below 0.01 BTC accounted for about 80% of Bitcoin transactions in 2026, according to data cited by CoinMarketCap in August. Their share stood near 44% in 2023, meaning low-value transfers have nearly doubled their portion of the network’s daily activity.

CryptoQuant head of research Julio Moreno said the economic value carried by the transactions remained small compared with their share of the total count. While the data shows that more transfers are reaching the blockchain, it does not establish that a similar increase has occurred in payment value, investment demand, or unique users.

A July crypto.news examination of transaction-count limitations also found that raw totals can provide an incomplete picture when fees are low. Cheap transactions allow automated systems, applications, or a small number of users to generate substantial activity without moving a comparable amount of capital.

Bitcoin transactions can also contain several inputs and outputs. A sender may pay more than one recipient in a single transaction, while exchanges and custodians may combine withdrawals through batching. Users can also move funds between addresses under their own control, so a transaction does not necessarily represent a payment between two separate people.

Lightning Network payments are settled away from Bitcoin’s base layer until participants close or rebalance their channels. As a result, the 893,391 figure covers confirmed on-chain transactions rather than every payment made using Bitcoin-linked infrastructure.

Network data shows volume and addresses moving differently

Blockchain.com’s dashboard paired the 893,000 transaction reading with approximately 415,000 active addresses, down 10.7% from the previous period. The difference shows that transaction totals and address activity can move in opposite directions because one address may participate in several transfers.

Transferred value reached about $3.36 billion, an increase of 33.8%, while total network fees stood near $191,073, down 8.1%, according to the same dashboard. Fee revenue therefore declined even as the number of confirmed transactions increased.

BitInfoCharts separately showed an average transaction fee near 0.0000024 BTC, worth about $0.19 at the recorded price, and a median transfer value of roughly $34.69. Its latest 24-hour window did not align exactly with the calendar-day period used by Galaxy, so the readings describe surrounding network conditions rather than the same fixed reporting period.

The relationship between high transaction volume and modest fees depends partly on the amount of block space consumed by each transfer. A transaction with many inputs can use more data than a simple payment, while exchanges can reduce their footprint by placing several customer withdrawals in one transaction.

Ordinals previously showed how a new type of activity could change Bitcoin’s transaction profile. During an earlier record in 2023, more than 307,000 Ordinals-related transactions were recorded in one day, according to Dune data cited at the time by Blockworks. Galaxy’s latest post did not attribute the September 2026 increase to Ordinals, Runes or another protocol.

U.S. investors face different on-chain and ETF exposure

For American investors, the importance of Bitcoin transaction activity depends on how they hold the asset. Buyers who use self-custody wallets create or receive on-chain transfers, while shareholders in U.S.-listed spot Bitcoin exchange-traded funds trade securities through brokerage accounts.

An earlier Bitcoin ETF explainer detailed how fund creations and redemptions differ from ordinary exchange purchases. Buying an ETF share does not directly create a Bitcoin transaction for each investor because authorized participants, fund sponsors and custodians handle the product’s underlying settlement process.

Daily blockchain totals cannot separate ETF-related custody movements from exchange withdrawals, individual payments, mining transfers, or wallet reorganizations. Transaction count also does not show whether a transfer represents buying or selling because the blockchain records movements between addresses rather than the purpose behind them.

Recent activity among older wallets provides another example of the distinction. A September report on older holdings cited K33 Research data showing that nearly 890,000 BTC moved during a seven-day period in early August, the highest seven-day active supply reading of 2026. Bitcoin was trading within one of its narrowest 30-day ranges since 2023 at the time, separating the on-chain movement from a major price breakout.

U.S. tax rules also treat Bitcoin transactions according to their purpose instead of their appearance on the blockchain. The Internal Revenue Service states that moving digital assets between wallets or accounts owned by the same taxpayer is generally not a taxable event, while selling crypto, exchanging it for another asset, or using it to buy goods and services can produce a reportable gain or loss.

Chainalysis estimated in August that the United States accounted for $112.6 billion of potentially taxable on-chain crypto activity during 2025. Its research placed the worldwide total above $457 billion but estimated that transactions within the reach of international reporting rules represented only 14% of the activity identified.

Under IRS guidance, taxpayers must retain records showing the asset’s acquisition date, cost basis, disposal date, proceeds, and resulting gain or loss for taxable digital-asset transactions.

Liquid Network has recovered 3,400 BTC worth about $269.2 million from the self-described white-hat hackers behind a 4,000 BTC withdrawal, although nearly $47 million remains outstanding.

Liquid Network has recovered 85% of the withdrawn Bitcoin

On-chain data shows that the actors returned 3,400 BTC, worth about $268.2 million when confirmed, to the Liquid Federation wallet in Bitcoin block 965,950. The transfer recovered about 85% of the withdrawn funds, while 598.5 BTC worth roughly $47 million remained in the actors’ address. Blockstream had previously told the group through a signed transaction message that its bridge nodes were patched and the funds were “safe to return.”

Around 598.5 BTC, valued at roughly $47 million, remained in the withdrawal-linked address after the larger transfer. The actors have not publicly explained why they retained the remaining coins or stated whether another repayment will follow.

Sunday’s incident began when a customer sent 4,000 Liquid Bitcoin, or L-BTC, to SideSwap’s peg-out service. SideSwap allows users to move value from the Liquid sidechain back to the Bitcoin network through an authorized withdrawal process.

The actors later identified themselves as “whitehats” in a message attached to a Bitcoin transaction. White-hat hackers generally find and report security weaknesses so developers can repair them, often receiving a bounty under terms agreed with the affected project.

No publicly disclosed agreement has established that the Liquid actors had permission to withdraw the funds, however. Blockstream and the actors also have not published terms granting a bounty or allowing the group to retain nearly 600 BTC.

As crypto.news reported before the return, the actors had offered to send back “most” of the Bitcoin once Blockstream fixed the vulnerability. At that point, no repayment had been confirmed, and the withdrawal represented about 95% of the Bitcoin reportedly held in Liquid’s federation wallet.

On-chain messages led to the 3,400 BTC repayment

Communication between Blockstream and the actors took place through messages attached to Bitcoin transactions, allowing both sides to exchange instructions without relying on a private messaging service.

In one transaction message, the actors told Blockstream to repair the flaw before they returned the Bitcoin.

“Please fix the bug first,” the message said. “The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix.”

Following that confirmation, the actors sent 3,400 BTC to the Liquid Federation address. The exchange shows that the repayment depended on the actors accepting Blockstream’s statement that the affected nodes were safe, though neither side has released a technical report identifying the flaw or explaining how the withdrawal became possible.

Liquid disabled its bridge nodes after detecting the transaction and asked exchanges to suspend L-BTC deposits and withdrawals. The shutdown restricted movement between Liquid and the Bitcoin base layer while developers investigated the incident and applied the patch.

Blockstream has said the key used during the withdrawal was not compromised, according to Reuters. The company has not released a complete post-mortem detailing whether the flaw affected SideSwap, the bridge software, Liquid’s Elements codebase, or another part of the peg-out process.

Ledger CTO questions the white-hat description

Ledger Chief Technology Officer Charles Guillemet challenged the actors’ description of themselves after they returned most of the coins but retained nearly 600 BTC.

“So, 3,400 BTC were refunded,” Guillemet wrote on X. “The ‘white hats’ still hold 600 BTC. If this was ever a negotiated reward under an encrypted contract signed on-chain, it looks more like extortion than white-hat hacking!”

His comment focused on the lack of disclosed terms covering the retained Bitcoin. A conventional bug bounty normally sets the reward and return conditions before a researcher keeps part of the affected funds, while no comparable agreement between Blockstream and the actors has been made public.

A similar issue emerged after the Verus Ethereum bridge exploit in May. In that case, the attacker returned 75% of the stolen funds and kept 1,350 ETH, then worth about $2.8 million, after Verus publicly offered settlement terms. The Liquid repayment differs because Blockstream has not said that the remaining 598.5 BTC constitutes an approved bounty.

White-hat claims also do not determine an actor’s legal status by themselves. Any legal assessment would depend on factors such as authorization, the method used to obtain the assets, communications between the parties, and applicable laws. No U.S. regulator or law enforcement agency has announced an action tied to the Liquid withdrawal.

L-BTC holders await details on backing and withdrawals

Liquid is a federated Bitcoin sidechain developed by Blockstream. Users lock BTC through its peg system and receive L-BTC on the sidechain at a one-to-one ratio, allowing faster settlement and asset transfers without moving every transaction across the Bitcoin base layer.

A recent bridge security explainer described how systems that lock assets on one network and issue corresponding tokens elsewhere depend on the security of their custody, validation, and message-processing systems. Failures at any of those points can interrupt redemptions even when the underlying blockchain continues operating normally.

For U.S.-based users, the immediate issue is operational rather than a change to federal crypto rules. American holders who use L-BTC face the same suspended deposits, withdrawals, and peg services as other users, while native BTC held directly on the Bitcoin blockchain is separate from Liquid’s sidechain system.

Liquid has not disclosed whether the returned 3,400 BTC has fully restored backing for the corresponding L-BTC supply. The network also has not said how it plans to handle any gap created by the 598.5 BTC still controlled by the actors.

No reopening time has been given for the bridge nodes, and exchanges were still being asked to keep L-BTC deposits and withdrawals suspended. Blockstream has also not published the promised technical account of the flaw or confirmed whether the actors intend to return the remaining Bitcoin.

The Ethereum Foundation has published ratings for 62 Hegotá proposals after collecting 397 assessments from about 60 protocol specialists across nine teams.

The Ethereum Foundation said in a Sept. 7 post on X that its Protocol Cluster had released two articles covering Hegotá and the long-term work planned for Ethereum’s base layer.

Ethereum ranks 62 Hegotá proposals

One article, called the Hegotá EIP Opinion Post and Tier List, evaluates all 62 Ethereum Improvement Proposals under consideration for the upgrade. According to the Foundation, it is the Protocol Cluster’s first shared tier list covering a single network upgrade.

Around 60 researchers, engineers, and specialists from nine teams submitted 397 individual ratings. Participants also held live discussions about proposals that produced differing opinions, allowing teams to compare technical benefits, development costs and possible conflicts before Hegotá’s scope is settled.

Ratings do not mean that all 62 proposals will reach Ethereum’s mainnet. The list records how members of the Protocol Cluster view each proposal while client developers, researchers and the Ethereum community continue assessing which changes can be built and tested within Hegotá’s development schedule.

In August, crypto.news reported on Hegotá as developers considered proposals related to censorship resistance, native account abstraction, privacy, validator economics, and gas pricing. At the time, the official meta EIP listed EIP-7805, known as Fork Choice-enforced Inclusion Lists, as the only feature scheduled for inclusion.

FOCIL would allow a committee of validators to publish lists of eligible transactions that block builders should include. Under the design, attesters could reject a block when a builder improperly leaves out listed transactions, reducing the influence that concentrated block-building infrastructure can exert over transaction inclusion.

Execution client teams were also asked to rank their preferred Hegotá proposals by Sept. 10. Previous discussions covered competing designs for native account abstraction, shorter slot times, state-growth pricing, privacy tools, and proposed changes to validator incentives, although consideration did not guarantee inclusion.

Ethereum’s public roadmap currently places Hegotá in 2027, after the Glamsterdam upgrade planned for the fourth quarter of 2026. The roadmap remains open to revision because Ethereum upgrades require implementation, development networks, public testnets, and client coordination before mainnet activation.

Quantum resistance becomes a 2029 commitment

The Protocol Cluster’s second article, Current and Emerging Priorities, sets out commitments and research tracks that extend beyond one hard fork. Among them, the cluster has set December 2029 as the deadline for making Ethereum Layer 1 resistant to attacks from quantum computers.

Fredrik Svantes, who leads protocol coordination at the Ethereum Foundation, said the cluster is “aggressively targeting” a quantum-resistant L1 no later than December 2029. In a separate X post, he said the commitment affects which proposals the teams recommend for Hegotá and how they assess other protocol work.

Ethereum is not quantum-resistant today. Its account and validator systems use cryptographic methods that future quantum machines could potentially break, although the Foundation’s quantum-resistance documentation says existing hardware remains far below the capacity required for such an attack.

Preparation involves more than replacing one algorithm. Ethereum researchers have divided the work across user accounts, validator signatures, consensus, data availability and zero-knowledge proof systems, each of which carries different performance and migration requirements.

Account-level experiments have already started. In June, Ethereum researcher Nico said users could add post-quantum protection through smart contract logic for about $0.07 per account, without waiting for a hard fork. The proposed method uses SPHINCS-based signatures, but the account protection would not make the entire network resistant to quantum attacks.

A draft submitted on Aug. 24 addresses another part of the migration. Under the proposed design, a replacement validator deposit contract would accept variable-length public keys and assign identifiers to different signature systems.

As the deposit proposal explains, the first identifier would preserve Ethereum’s existing BLS deposits, while later identifiers could support post-quantum signature schemes. The proposal does not select a replacement algorithm, and Ethereum would still need a consensus-layer change to verify and process signatures created under any new system.

Developers also described an irreversible migration switch that could eventually stop new BLS deposits after an agreed transition period. Existing validators, staking providers, and client teams would need time to update their infrastructure before such a switch could safely take effect.

Hegotá connects security with account changes

Native account abstraction could support the quantum-security plan by allowing Ethereum accounts to use different methods for authorizing transactions. Ethereum’s roadmap says programmable validation could add social recovery, spending controls and sponsored gas while providing a route away from one fixed signature scheme.

Privacy, scaling, and proof verification also remain part of the same development program. In August, Vitalik Buterin’s updated Ethereum roadmap placed post-quantum scaling beside native rollups, stronger privacy tools and AI-assisted formal verification.

Hegotá will not complete every part of that program. The tier-list process instead gives protocol teams a shared record of which EIPs have support, which require more research, and which may create too much complexity for the planned upgrade.

Proposals must still pass through Ethereum’s usual development process. Client teams must implement accepted changes, operate development networks, and run public testnets before core developers can agree on a mainnet activation date.

US standards add pressure to the 2029 deadline

For U.S. investors and companies using Ethereum, the Foundation’s timetable sits close to the federal government’s own post-quantum transition. The U.S. National Institute of Standards and Technology has told organizations to begin replacing cryptography that quantum computers could defeat.

In August 2024, NIST approved three standards for post-quantum security. FIPS 203 covers a key-encapsulation method, while FIPS 204 and FIPS 205 specify lattice-based and hash-based digital signature systems.

NIST said the standards were ready for immediate use and later advised organizations to identify systems that depend on vulnerable public-key algorithms. Its transition plan calls for high-risk systems to move earlier, with quantum-vulnerable algorithms removed from NIST standards by 2035.

Ethereum’s December 2029 commitment does not create a U.S. regulatory requirement for ETH holders, exchanges, custodians or exchange-traded products. It does, however, fall within the migration period established by the U.S. technical standards agency, which gives American infrastructure providers a federal reference point when assessing their cryptographic systems.

The Foundation has scheduled an ask-me-anything session for Sept. 16 at 14:00 UTC in Reddit’s r/ethereum community. Protocol Cluster members will take questions about the Hegotá rankings, disputed proposals, and the priorities described in the two articles.

Brazil’s largest banks have expanded their crypto offerings to as many as 28 assets after transactions across the country reached R$505.5 billion or about $98.7 billion in 2025.

Brazil banks expand crypto access without taking exposure

Folha de S.Paulo reported on Sept. 7 that Itaú, Bradesco, Santander, Banco do Brasil and Nubank have expanded their digital-asset services since 2025, giving customers access to cryptocurrencies through familiar banking apps.

Itaú, Brazil’s largest bank by assets under management, now offers 15 crypto assets through its investment platform. Its selection includes Bitcoin (BTC), Ethereum (ETH) and Circle’s dollar-backed stablecoin USDC.

Nubank has built a larger selection, listing 28 digital assets for more than 7 million users of its crypto platform. Banco do Brasil, the country’s most profitable state-controlled bank, began allowing customers to buy Bitcoin and Ethereum directly in January.

Since opening the service, Banco do Brasil has processed more than R$11 million ($2.1 million) in customer transactions, according to information the bank provided to Folha.

Customer access has not led the institutions to buy crypto for their own accounts. Central Bank of Brazil filings from March 2026, reviewed by the newspaper, showed that Brazilian banks reported no virtual assets on their balance sheets.

Under the service model used by the banks, customers can purchase or hold digital assets while the institution provides custody or processes the order. Proprietary exposure would arise only if a bank used its own funds to acquire crypto and accepted the related price, liquidity, and credit risks.

Carlos Akira Sato, co-founder of financial consultancy Syscapital, said demand from clients has driven banks to add the products even as they remain cautious about direct exposure.

“In a conservative sector, as the banking sector is, regulation makes institutions more secure to launch their products,” Sato told Folha.

Crypto transactions reached R$505.5 billion in 2025

Brazilian users and companies completed R$505.5 billion ($98.7 billion) in crypto transactions during 2025, according to data from the country’s federal tax authority, Receita Federal.

The total increased 22% from 2024 and 433% from the amount recorded in 2020. Companies accounted for nearly all reported activity, completing R$497 billion, about $97 billion in transactions, or 98.3% of the annual volume.

Individual investors generated the remaining share. The figures cover activity reported to the tax authority and do not show how much of the volume passed through bank-operated platforms.

Stablecoins make up a large part of Brazil’s digital-asset market because they give users access to tokens designed to track the U.S. dollar. In July, the International Monetary Fund called for closer stablecoin oversight as cross-border crypto flows became more connected with Brazil’s financial system.

The IMF’s Financial System Stability Assessment said stablecoin purchases in Brazil were two to three times more sensitive to global shocks than portfolio investment and foreign direct investment. The fund also identified gaps in customer protection, anti-money laundering controls, and oversight of cross-border activity.

Banco Safra, which mainly serves wealthy clients, entered the stablecoin market directly in September 2025 by issuing Safra Dólar. The bank keeps custody of the dollar-pegged token in-house and offers it to clients seeking dollar exposure without opening an overseas bank account.

Itaú had also considered issuing a token tied to Brazil’s real. In April 2025, the bank’s digital-assets head, Guto Antunes, said the project depended on the outcome of a Central Bank consultation, although stablecoins had remained on Itaú’s agenda. The bank was still assessing an in-house token while regulators worked on rules for the sector.

Brazil crypto rules set capital and licensing requirements

Brazil’s Legal Framework for Virtual Assets, enacted in 2022, assigned oversight of the sector to the Central Bank. The regulator then published Resolutions 519, 520 and 521 in November 2025 to set operating rules for virtual-asset service providers.

Companies that let customers trade, transfer or hold crypto must obtain authorization, maintain minimum capital and separate client assets from company funds. Around 120 crypto firms operating in Brazil must meet the licensing requirements by Oct. 30, 2026.

In July, the Central Bank approved additional capital and risk rules that will begin taking effect in January 2027. The framework places virtual-asset service providers within the regulatory structure used for brokers and distributors while adding governance, disclosure, and risk-management requirements.

Under the new prudential structure, crypto providers will enter Brazil’s S4 regulatory segment by mid-2028. Smaller institutions classified under the S5 segment will no longer be allowed to provide virtual-asset services.

Resolution 521 also brought some crypto transactions under Brazil’s foreign-exchange framework. Purchases, sales or exchanges involving tokens denominated in foreign currency, including dollar-pegged stablecoins, are treated as foreign-exchange operations and carry reporting requirements similar to certain international money transfers.

Licensed banks already operate under Central Bank supervision, giving them an established compliance structure as crypto-only companies prepare authorization requests. The rules do not require banks to purchase digital assets for their own portfolios before offering custody or execution services to clients.

U.S. banks can also provide crypto custody

American banking rules similarly separate customer-directed crypto services from assets purchased for a bank’s own account. In March 2025, the Office of the Comptroller of the Currency confirmed that national banks and federal savings associations may provide crypto custody, conduct certain stablecoin activities and participate in distributed-ledger networks.

OCC Interpretive Letter 1183 removed an earlier requirement for supervised banks to obtain written non-objection before starting permitted crypto activities. The agency said banks must still conduct such business safely, fairly, and in compliance with applicable law.

Two months later, OCC Interpretive Letter 1184 confirmed that covered banks may buy and sell crypto held in custody when acting on a customer’s instructions. Banks may also outsource custody and execution to third parties, provided they apply suitable third-party risk controls.

The UK’s Financial Conduct Authority (FCA) reportedly has reached out to prediction market companies as part of discussions over whether the regulator would loosen a ban for retail investors, in place since 2019.

According to a Friday report from The Times, the FCA is weighing lifting a ban on prediction market platforms like Polymarket and Kalshi for UK-based retail investors. Because prediction markets offer binary options on event contracts, such as for sports, politics and the weather, they fall under an April 2019 ban imposed by the FCA, in which companies were “prohibited from selling, marketing or distributing binary options to retail consumers.”

“Binary options are gambling products dressed up as financial instruments,” said the FCA’s executive director of strategy and competition, Christopher Woolard, at the time of the ban.

According to The Times report, many retail investors based in the UK have been using virtual private networks (VPNs) to bypass the country’s restrictions on prediction markets and execute trades on Kalshi and Polymarket, both with operations in the US. Bernstein Research speculated in April that the total prediction market industry could rise to about $240 billion in trading volume in 2026 and $1 trillion in 2030.

Should the FCA overturn the 2019 ban, prediction market platforms like Kalshi and Polymarket could face similar challenges as they are dealing with in the US, where individual state gaming authorities are filing lawsuits against the companies over sporting event contracts. Last week, New Jersey officials petitioned the Supreme Court to hear its case against Kalshi, potentially leading to clarification between state and federal authorities over prediction markets.

Related: Kalshi issues first lifetime ban for Republican politician over insider bets

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