Harmony has proposed closing its seven-year-old Layer 1 blockchain, issuing ONE on Ethereum and directing future token emissions to a new AI video project.

Harmony said in a Sept. 6 post that the mainnet’s exposure to “state actors” and “AI agents” has made continued operation too risky, leading the team to propose retiring the network it launched in 2019.

The plan remains nonbinding, and Harmony has not announced when it will produce the blockchain’s final block. The team also has not explained whether validators will decide the proposal through the network’s existing governance process.

Under Harmony’s published governance rules, a proposal must receive votes representing at least 51% of total stake weight. Approval requires support from 66.7% of the participating voting power after a seven-day introduction period and a 14-day vote.

Harmony would recreate ONE balances on Ethereum

Rather than asking holders to exchange their tokens manually, Harmony plans to take a snapshot at the final block and distribute replacement ONE tokens on Ethereum. The ERC-20 version would go to the same addresses recorded in the snapshot, removing the need for individual claims.

The snapshot would cover ONE held in personal wallets, staking delegations, unclaimed validator rewards, smart contracts, and centralized exchange accounts. Harmony plans to coordinate with exchanges so that their existing ONE listings can move to the Ethereum-based token.

Delegated tokens and unpaid validator rewards would be handled separately through individual governor vaults. According to the proposal, the total ONE supply and its scheduled issuance rate would remain unchanged during the transition.

To allow outside review of the process, Harmony said it would publish the Ethereum token contract, snapshot calculations, and airdrop scripts. The project has not yet released the contract address or the final snapshot method.

While ordinary wallet balances would be included automatically, several types of holdings cannot be copied to Ethereum in their current form. Harmony said multisignature vaults, liquidity pools, and applications running on the mainnet would not migrate with the token balances.

Users have therefore been asked to withdraw from smart contracts before Sept. 10. Anyone who leaves assets inside a decentralized exchange pool, lending market, or another on-chain application could face complications because the protocol state and its related contracts will not be recreated on Ethereum.

For centralized exchange customers, the process will depend partly on each platform’s support for the migration. Harmony has proposed moving exchange-held balances and listings to the ERC-20 token, although it has not published a list of participating exchanges or their individual timetables.

Validators face separate shutdown conditions

Beginning Sept. 10, validators would be allowed to turn off their nodes as the network prepares for its final block. Harmony has set aside $1.372 million for eligible validators and their delegators, with payments scheduled across four quarterly installments.

Eligibility carries several conditions. Validators must stop their nodes within the required period, retain their stakes, sign an agreement, and continue serving as governors after the mainnet closes. The pool would also cover the difference between the rewards earned at a validator’s last block and the rewards it would have received through the final network block.

Harmony has not disclosed how the $1.372 million will be divided among validators and delegators. Final payments may depend on stake levels and compliance with the proposed agreements, according to the terms described by the team.

Operators could later remain in governance or join Harmony’s planned “remix economy” as operators or affiliates. Future ONE emissions would fund the new AI video initiative, although Harmony said governors could still provide feedback on the arrangement.

Under the proposed model, video creators would publish prompts and related assets that fans could copy and alter. AI agents would turn the resulting branches into additional clips, while operators would manage video generation, distribution and content moderation.

Harmony said staking levels and service uptime would affect operator rewards. The project also plans to subsidize graphics processing hardware during the first year and has projected up to $1 million in combined operator revenue, subject to the service and staking requirements.

The business model includes a proposed $10 monthly subscription. Affiliates would receive a recurring 30% commission from users they refer, while Harmony estimated that advertising could produce tens of millions of dollars if the platform reached 1 million users. Both revenue figures remain projections from the project rather than confirmed income.

August exploit pushed Harmony toward a shutdown

The retirement proposal follows an August security breach that produced unauthorized ONE tokens and forced the team to consider reversing several days of blockchain activity.

On Aug. 12, crypto.news reported an unauthorized mint after on-chain researcher Juiceberg estimated that almost 4 billion ONE had been created through empty blocks. The researcher claimed that about 2.8 billion tokens reached centralized exchanges, but Harmony had not confirmed either figure when it first disclosed the incident.

Harmony’s later investigation found that more than 3 trillion ONE had been generated through six transactions. The team linked the exploit to a weakness in cross-shard receipt verification that allowed valid receipts to be processed repeatedly without matching deductions elsewhere on the network.

One wallet connected to the activity attempted 534 transfers of 5 billion ONE within 106 seconds, according to Harmony’s reconstruction. Of the attempted transfers, 477 succeeded and moved a combined 2.385 trillion ONE.

Investigators traced the created tokens to standalone wallets, exchange accounts, decentralized exchange routers, liquidity pools, bridge contracts, wrapped ONE and staking wallets. Harmony said it contacted exchanges, bridges, and law-enforcement agencies while tracking the assets.

By Aug. 17, the team had proposed returning both network shards to checkpoints recorded at 11:25:37 p.m. UTC on Aug. 11. Shard 0 would keep block 92,730,034 and restart from the next block, while shard 1 would return to block 94,978,278 despite not being the origin of the unauthorized mint.

The rollback would remove 141,628 consecutive blocks from shard 0, including 109,126 regular transactions and 315 staking transactions. Harmony classified 104,545 of the regular transactions, or 95.8%, as automated activity, with almost 100,000 tied to decentralized exchange automation.

At the time, the team considered migration but said it would cause more disruption than a rollback. Less than a month later, moving ONE to Ethereum became part of the proposed mainnet closure.

U.S. holders may need detailed migration records

For U.S. token holders, the migration may create tax-record concerns even if Harmony distributes ERC-20 ONE automatically. The IRS treats digital assets as property and requires taxpayers to report sales, exchanges, and other taxable disposals.

IRS guidance says exchanging one digital asset for another that differs materially in kind or extent can produce a capital gain or loss. Harmony describes the replacement as the same ONE token with unchanged supply and emissions, but the agency has not issued guidance addressing this specific mainnet-to-Ethereum migration.

U.S. holders may therefore need to preserve their original purchase records, wallet history, the final Harmony snapshot, and the value of the Ethereum token when received. Exchange customers should also retain any migration notices and Form 1099-DA information supplied by their platforms, since the IRS says taxpayers remain responsible for reporting taxable activity even when a broker does not provide a form.

Harmony had faced security problems before the August incident. In December 2023, the project disclosed that faulty staking logic had created 146.28 million ONE across 74 delegator addresses, prompting an emergency hard fork at block 51,118,080.

Its largest earlier loss came in June 2022, when attackers stole nearly $100 million from the Horizon cross-chain bridge after gaining control of keys used by its multisignature wallet. Harmony responded by raising its hacker bounty to $10 million and working with exchanges, analytics firms, and law enforcement.

A month after the bridge attack, developers proposed minting 4.97 billion ONE to reimburse affected users over three years. Community members opposed the resulting dilution, and Harmony later withdrew the plan in favor of a recovery program that would not add tokens through a hard fork.

French corporate Bitcoin treasury firm Capital B has expanded its holdings with a new purchase of 376 BTC, acquiring the coins for €25.3 million (about $29.5 million). After the deal, Capital B’s total Bitcoin treasury rises to 3,521 BTC, according to a company announcement published Monday.

The acquisition follows Capital B’s capital raises of roughly €30.1 million (about $35 million), which included a private placement backed by investors Adam Back and TOBAM. The company says Swissquote Bank Europe executed the purchase, while Taurus provided custody for the assets.

Key takeaways

• Capital B bought 376 BTC for €25.3 million, bringing total holdings to 3,521 BTC.
• The purchase was funded after €30.1 million in capital raises, including a private placement backed by Adam Back and TOBAM.
• Capital B paid an average of €67,182 per BTC for the latest tranche; its overall average cost across the treasury now sits at €87,878.
• The latest buy is Capital B’s largest since September 2025, when it acquired 551 BTC for €54.7 million.
• Capital B now ranks 25th among publicly traded companies by Bitcoin holdings, based on BitcoinTreasuries.net.

Details of Capital B’s latest Bitcoin purchase

Capital B’s latest acquisition consists of 376 Bitcoin purchased at an average price of €67,182 per BTC. In the announcement, the company links the buy to its financing activity completed ahead of the trade.

Execution and custody were handled by third parties: Swissquote Bank Europe carried out the purchase, while Taurus is designated as the custodian. Capital B also distinguishes operational holdings from its treasury reserve, stating that it holds an additional 61 BTC for operational purposes that are kept separate from the company’s Bitcoin treasury and excluded from its Bitcoin-related performance metrics.

Across its Bitcoin treasury program, Capital B reports spending a total of €309.4 million at an average cost basis of €87,878 per BTC. Based on that accumulated position, the firm moved to 25th place among publicly traded companies tracked by BitcoinTreasuries.net.

Why the financing and custody structure matters

Corporate Bitcoin treasury strategies often live or die on execution quality, custody arrangements, and the consistency of funding. In this case, Capital B’s announcement ties the purchase directly to capital raised—roughly €30.1 million—rather than leaving investors to infer the financing source after the fact.

For market participants, the specific counterparties named for execution (Swissquote Bank Europe) and custody (Taurus) are also notable because treasury programs depend on minimizing operational risk. Even when the market impact is not the main driver, reliable custody and clear segregation between operational BTC and treasury BTC can matter for how companies report performance and how investors evaluate treasury discipline.

Capital B’s position in the wider corporate Bitcoin race

Capital B’s purchase adds to a broader pattern seen among corporate Bitcoin holders: while some companies have moved to unwind holdings, others continue adding. The announcement places Capital B among the persistent accumulators—particularly relevant as Bitcoin treasury rankings can shift quickly with even mid-sized acquisitions.

Japan-based Metaplanet, for example, reportedly acquired 2,823 BTC during the second quarter for about $222 million, bringing its total to 43,000 BTC. BitcoinTreasuries.net data cited in the article places Metaplanet third among publicly traded corporate Bitcoin holders, behind Strategy and Twenty One Capital.

Meanwhile, Sweden-based H100 Group reportedly expanded its treasury in August after an all-share deal involving Norwegian companies holding 2,455 BTC. That transaction reportedly lifted H100’s holdings to 3,506 BTC, positioning it as Europe’s second-largest publicly traded corporate holder at the time. Capital B’s latest buy leaves it 15 BTC ahead of H100, while both remain behind Germany’s Bitcoin Group SE, which holds 3,605 BTC, according to the cited ranking data.

At the top end of the corporate list, Strategy—described as the world’s largest corporate Bitcoin holder—resumed buying in August after a pause of two months. The article states Strategy purchased 4,603 BTC for $370 million, bringing total holdings to 845,050 BTC at an aggregated purchase value of $63.3 billion, again referencing BitcoinTreasuries.net for rank context.

What to watch after the September 2025 high-water mark

Capital B’s newest tranche is its largest acquisition since September 2025, when it bought 551 BTC for €54.7 million. That matters because it suggests the firm has not been buying at a comparable scale for most of the interim period, even if smaller additions or operational balance changes may have occurred.

Going forward, investors will likely focus on whether Capital B maintains a steady cadence of treasury purchases—especially given that the latest deal appears tied to fresh capital raising. The key uncertainty is how quickly (and at what average prices) future acquisitions will follow, and whether treasury growth continues to translate into meaningful movement within the publicly traded rankings tracked by BitcoinTreasuries.net.

For now, Capital B’s updated holdings and cost basis provide a clear snapshot of where the company stands in the competitive landscape of corporate Bitcoin accumulation—and its next reported treasury purchase will determine whether it can keep closing the gap to Europe’s largest peers.

Crypto fund flows are becoming increasingly sensitive to changes in the US interest-rate outlook, with CoinShares arguing that Federal Reserve policy remains a key barrier to Bitcoin (BTC) breaking above $80,000 despite continued investor demand for crypto.

In his latest market update, CoinShares head of research James Butterfil argued that “Bitcoin is trading like gold again, but the Fed still sets the ceiling” at around $80,000.

That sensitivity was evident after Fed Chair Kevin Warsh’s speech at Jackson Hole. Warsh said progress on inflation had been modest and that price pressures were not easing quickly enough to give the central bank’s policy makers the confidence inflation was returning to its 2% target. Roughly $100 million exited digital asset investment products immediately after the speech, as markets sharply increased the probability of a September rate hike.

Flows reversed over the following week, reaching $1 billion by Sept. 4. The turnaround coincided with comments from Fed Governor Christopher Waller, who pointed to recent signs of “disinflation” and said he was inclined to keep rates steady in September if upcoming inflation data showed further progress.

“Investors are not exiting the asset class,” Butterfill wrote. “They are trading the rate path.”

As of Monday, Fed Funds futures prices implied a roughly 60% chance of a rate hike following next week’s Federal Open Market Committee (FOMC) meeting, according to CME Group.

Markets are now pricing in a 25 basis-point rate hike on Sept. 16. Source: CME Group

The movements suggest that Bitcoin and broader digital asset markets remain highly sensitive to shifts in liquidity and monetary policy. Easier financial conditions have historically supported crypto and other risk assets.

Related: Crypto Biz: AI took a back seat when Bitcoin started climbing

Treasury buybacks add to liquidity backdrop

CoinShares’ assessment comes against the backdrop of a strong rebound in Bitcoin and the broader digital asset market last month, when the US Treasury announced plans to double certain long-dated bond buybacks from $2 billion to $4 billion per operation. Bitcoin climbed from the low $60,000s to above $80,000 during the month. 

The expanded buyback program is expected to run from Sept. 9 through Nov. 4.

“Around the Treasury announcement we also saw equity sell-offs and shifts across the yield curve, layered on top of the ongoing noise from the Iran war — oil and equities swinging depending on whether or not people are feeling optimistic about diplomacy on any given day,” wrote 21shares co-founder Ophelia Snyder in her Substack newsletter last week.

“Taken together, these factors suggest to me that the current Bitcoin rally may have less to do with crypto-specific catalysts and more to do with growing interest in de-risking exposure to the US specifically,” she added.

The move reinforced the market’s focus on liquidity conditions and prompted Standard Chartered to forecast that Bitcoin could reach $100,000 before the end of the year.

Related: Strategy’s $66B Bitcoin machine hinges on capital markets, not BTC price: Report

The Philippines’ central bank has proposed freezing new payment-system operator registrations for 12 months while imposing tighter controls on payment arrangements involving virtual asset service providers (VASPs). 

Under a draft circular, the Bangko Sentral ng Pilipinas (BSP) said it would suspend acceptance and processing of applications for operators of payment systems (OPS) to conduct a “holistic review” of its taxonomy and licensing framework. 

Applications submitted before the suspension could continue to be evaluated, but the BSP would not approve or deny any until the pause ends. Entities would be barred from starting activities that require OPS registration unless the regulator authorizes them otherwise. 

The proposal would require BSP-supervised institutions offering merchant acquisition services to handle regulated VASPs through direct merchant arrangements. Those relationships would be subject to enhanced due diligence and monitoring, transaction and settlement limits and other risk-based controls. 

The requirement covers virtual asset firms that must be licensed, registered or authorized by the BSP, the Philippine Securities and Exchange Commission, or another authority. VASPs are listed alongside gambling businesses, gaming providers, adult-oriented businesses and money service businesses.

The draft would take effect 15 days after publication if finalized, and the BSP is currently accepting feedback.

Cointelegraph reached out to the BSP for more information but did not receive a response before publication. 

Related: Philippines SEC flags dYdX, six crypto platforms as unauthorized

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