Crypto World
Tokenized Stocks Face Liquidity Risks, Revenue Fragmentation: Study
The SEC’s move to permit third-party listings of tokenized stocks could reshape on-chain market structure, raising questions about liquidity concentration and where revenue accrues as markets fragment across multiple blockchain networks. While proponents see practical benefits, researchers warn that fragmentation could pose real risks to price discovery and market efficiency.
According to Tiger Research director and head of research, Ryan Yoon, liquidity fragmentation may occur as capital migrates away from centralized venues to a broader set of blockchain platforms and decentralized exchanges.
“Traditional finance views the breakup of its previously consolidated, centralized liquidity as a serious structural threat,”
Yoon said, underscoring the potential for trading to spread across disparate networks rather than concentrate on established venues like the NYSE or Nasdaq. When the same listed stock is tokenized and traded across multiple networks, order flow could become dispersed, leading to price discrepancies and higher slippage on sizeable orders—ultimately eroding market efficiency.
The analysis comes in the wake of the SEC’s recent “innovation exemption” plan, announced earlier in the week, which would allow third-party exchanges to list tokenized stocks without requiring issuer approval. The regulatory move aims to accelerate on-chain access to traditional equities, but observers caution that the initial scope and implementation remain unsettled. announced this exemption as part of a broader effort to modernize how tokenized assets are treated in U.S. markets.
Key takeaways
- The SEC’s innovation exemption could enable third-party exchanges to list tokenized stocks without issuer consent, altering market infrastructure.
- Experts warn liquidity fragmentation across blockchains could cause price differences, higher slippage on large trades, and reduced market efficiency.
- Revenue fragmentation may shift value away from domestic exchanges, with potential implications for national financial competitiveness.
- On-chain activity in tokenized stocks is expanding, as evidenced by growing open interest on certain decentralized venues.
- Benchmarked benefits—faster settlement, fractional ownership, lower costs, and around-the-clock trading—are cited as practical incentives, though regulatory clarity remains incomplete.
Liquidity fragmentation and market efficiency
At the heart of the debate is whether tokenized stocks will concentrate liquidity on a single venue or spread it across multiple chains and decentralized platforms. Yoon emphasized that dispersing liquidity undermines the traditional model where large-cap equities benefit from deep, centralized order books. The concern is not merely about where trades occur, but how price formation unfolds when activity is split among competing ecosystems. If broad adoption proceeds on several networks, traders—especially institutions placing sizable orders—could face inconsistent pricing and higher costs just to execute similar exposure across platforms.
Proponents counter that tokenized assets unlock new efficiencies, such as peer-to-peer settlement and continuous access to markets beyond standard U.S. hours. Still, the practical impact of fragmentation depends on the balance of liquidity, custody arrangements, and the ability of on-chain venues to deliver robust price discovery relative to traditional venues. In the near term, observers will be watching whether new listings on third-party platforms concentrate sufficient liquidity to prevent persistent mispricings.
Revenue fragmentation and competitiveness
A second structural concern raised by Yoon is how revenues flow in a multi-chain environment. If tokenized stocks trade across various platforms and geographies, revenue that would typically accrue to domestic exchanges could be dispersed, potentially affecting national financial competitiveness. The shift mirrors broader debates about how blockchain-based markets may reallocate economic value away from traditional hubs and toward on-chain ecosystems with global reach.
Market activity on decentralized venues already illustrates the broader dynamics at play. Hyperliquid, a decentralized exchange focused on real-world assets, has reported an open interest milestone—reaching the mid-double-digit billions in recent weeks—highlighting how demand for on-chainRWA trading continues to grow even as the regulatory landscape evolves. In parallel, observers note that tokenized securities currently represent a small but growing slice of on-chain value, with tokenized stocks accounting for about 4.4% of total on-chain real-world asset value, per data aggregator RWA.xyz.
Industry voices warn that the evolution could force incumbents to reassess their on-chain strategies. Maja Vujinovic, chief strategist for digital assets at FG Nexus, cautioned that markets may split into “disconnected pools” that could generate price-tracking errors and shadow-shorting vulnerabilities if localized buyers fail to stabilize a token’s price across networks. The overarching question is whether the ecosystem can cultivate sufficiently broad liquidity and robust price formation across diverse venues to prevent instability as tokenized equities gain traction.
Market momentum is real, but the path forward remains unsettled. Tokenized stocks are already being discussed as part of broader debates about how real-world assets can be efficiently represented on-chain, with the potential to reshape access to U.S. equities for global investors who face brokerage limitations of traditional markets.
As regulatory clarity continues to unfold, observers emphasize that the current discussions are less about a single policy moment and more about the framework that will govern tokenized assets in the coming years. Hester Peirce, SEC Commissioner, noted that any exemption would be scoped narrowly, restricting digital representations to those corresponding to underlying equities that investors can already purchase in the secondary market. The final contours of what will be permitted remain to be finalized, and stakeholders will be watching how the rule interacts with custody standards, settlement timelines, and market surveillance.
Practical market benefits and adoption momentum
Despite the tensions, there are practical arguments in favor of tokenized stock trading. Advocates point to potential improvements in settlement speed, fractional ownership, and lower transaction costs, along with the possibility of 24/7 trading that could broaden market access. The Blockchain Council has highlighted these benefits as part of a broader push to modernize how equity exposure is accessed and traded. For non-U.S. investors, tokenized stock products could provide easier entry into U.S.-listed equities without relying on traditional brokerage rails.
Industry observers also note that some market participants anticipate a gradual migration of flows onto on-chain rails as regulation clarifies and infrastructure matures. Siebert Financial’s senior research analyst Brian Vieten suggested that the industry could accelerate the transition of the U.S. financial system from legacy rails to blockchain-enabled infrastructure. He added that a portion of this flow might eventually move toward high-quality networks like Bitcoin and specialized platforms such as Hyperliquid as the market tests the new regime.
What to watch next
The coming weeks will be critical for observing how the SEC’s exemption is scoped and how exchanges respond to the evolving regulatory framework. Key questions include how custody, settlement cycles, and corporate actions will be handled for tokenized stocks, and whether liquidity will consolidate quickly on a few dominant networks or remain fragmented across multiple platforms. Investors and builders should monitor open-interest trends, the emergence of liquidity metrics across networks, and any regulatory disclosures that clarify the permissible scope of tokenized equity representations.
Ultimately, the trajectory of tokenized stocks will hinge on whether on-chain markets can deliver reliable liquidity and accurate price discovery while preserving investor protections. The next developments in policy detail, exchange implementations, and cross-network trading infrastructure will reveal how far the promise of tokenized equities can translate into a durable, global market.
As the regulatory dialogue continues, readers should keep an eye on how volume and liquidity converge across platforms, how revenue distributions evolve, and which networks emerge as the preferred rails for tokenized equity trading in a rapidly expanding on-chain market.
The lobbying arm of crypto futures exchange Hyperliquid and venture capital firm Paradigm has urged the US Treasury to revise a proposed anti-money laundering and sanctions rule for stablecoin issuers.
The Hyperliquid Policy Center and Paradigm said in a letter on Tuesday that some secondary market obligations should be clarified or narrowed “to avoid unintended consequences for permissionless blockchain infrastructure and the DeFi ecosystem.”
The pair said they endorse the Financial Crimes Enforcement Network’s (FinCEN) approach of putting compliance obligations on the “primary market,” such as issuers who have customer information, and taking a “limited approach” to the secondary market, where issuers only see wallets and transactions.
“The same principle should guide the agencies’ implementation of AML and sanctions requirements for stablecoins deployed to permissionless environments,” they argued.
The letter was in response to a rule the Treasury proposed in April to implement GENIUS Act provisions relating to stablecoin issuers, requiring stablecoin issuers to have the capability to block, freeze or reject transactions that violate US law or sanctions on both the primary and secondary markets.
Source: Stefan Schropp
Hyperliquid and Paradigm said the proposal sweeps secondary market activity into an issuer’s compliance perimeter that they “cannot meaningfully police.”
They argued it also treats smart contract interactions as an activity that carries sanctions liability “regardless of whether the issuer has any relationship with, or visibility into, the transacting parties.”
The pair said an issuer who is facing the obligations proposed would be incentivized to only deploy into a permissioned environment, which they argued would see US-regulated stablecoins pulled out of decentralized finance to create “a void filled by unregulated, offshore, non-dollar alternatives.”
Related: Solana Institute CEO says CLARITY Act must shield open-source developers
US President Donald Trump signed the GENIUS Act into law last year, which outlined how stablecoins and their issuers are to be regulated. Federal agencies are currently looking at how to implement the law, which is set to go into effect in January 2027 at the latest.
The Senate is currently debating a crypto bill that could include further rules for stablecoin issuers and remove liability for developers of crypto platforms regarding money laundering and sanctions compliance.
Provisions for the legislation, dubbed the CLARITY Act, are still under discussion, and some lawmakers are pushing for a full Senate vote on the bill before the November elections.
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SpaceX’s planned public offering has attracted more than $250 billion in orders, nearly four times the $75 billion it aims to raise.
Summary
- SpaceX has attracted over $250 billion in orders for its planned $75 billion public offering.
- Crypto’s recent selloff offers early evidence of capital rotation, though other market pressures remain active.
- Nasdaq rules could admit SpaceX after 15 trading days, creating another potential demand wave later.
The scale has renewed questions about whether the June 12 listing will pull capital from crypto markets.
The IPO is expected to price Thursday at about $135 per share. Orders can still change before final allocations, but early demand shows how much cash investors are preparing to move.
Crypto shows early signs of a liquidity squeeze
As crypto.news reported, the digital asset market lost about $250 billion during the June selloff, while Bitcoin briefly fell below $62,000. The timing supports claims that some investors are rotating toward major technology listings.
SpaceX is not the only pressure. Geopolitical tension, weaker rate-cut hopes and leveraged liquidations have also weighed on Bitcoin and altcoins. The IPO may add strain without being the sole cause.
“That combined selling is what you are seeing right now,” market commentator Bull Theory said.
The statement remains an interpretation because public data does not show how much crypto was sold specifically to fund SpaceX orders.
SpaceX trading may keep capital tied up
SpaceX plans to sell $75 billion of stock at a valuation near $1.8 trillion. Reuters reported that retail investors may receive up to 30% of the offering, far above normal IPO allocations.
The demand has reached currency markets. South Korean investors reportedly generated about $1.5 billion in dollar purchases linked to the IPO, adding pressure to the won before those orders cleared.
A strong opening could encourage investors who missed allocations to sell other assets and buy SPCX. A weak debut could ease that pressure, though the stock may remain volatile because only a small portion of SpaceX will trade publicly.
Crypto derivatives signal demand and volatility
Binance, Coinbase, Bybit and Bitget launched SpaceX pre-IPO perpetuals, while Kraken offered tokenized IPO access in more than 110 markets. The products give traders exposure before the stock begins trading.
Hyperliquid’s synthetic SpaceX contract climbed above $200 before retreating toward $165. An earlier SpaceX-linked contract also fell 45% within 30 minutes, liquidating about $1.5 million as thin liquidity worsened the move.
These products do not represent SpaceX shares. Their leverage and limited depth can produce prices that differ sharply from the stock after listing.
Nasdaq entry could extend the liquidity contest
Nasdaq’s updated rules let a large new listing qualify for fast entry into the Nasdaq-100. An eligible company is assessed after seven trading days and can normally enter after 15.
Some analysts estimate that inclusion could trigger $22 billion to $27 billion in passive buying. Nasdaq has not confirmed that figure. Its rules also say fast entry does not require removing another company.
Crypto’s main risk is therefore continued competition for speculative capital. Bitcoin ETF flows, stablecoin reserves and SPCX’s opening performance will show whether pressure continues after the debut.
Blockchain security firm Chainalysis is strengthening its collaboration with South Korea’s national police to crack down on crypto crimes, including those involving North Korea.
Chainalysis said on Wednesday that it signed a memorandum of understanding with the Korean National Police Agency (KNPA), aimed at building investigative capability within South Korea’s law enforcement.
Chainalysis said one of the driving factors behind the agreement is to better combat North Korea-linked crypto attacks, with South Korea’s police “at the forefront” of tackling these threats. However, Chainalysis’s country director Ryan Kwon said agreement aims to tackle all threats.
“While North Korean-driven attacks are understandably a national security focus, this partnership isn’t designed around a single threat. It’s fundamentally about building institutional capability,” Kwon told Cointelegraph.
Signing ceremony of the MoU between Chainalysis and the Korean National Police Agency. Source: Chainalysis
In April, crypto theft linked to North Korea topped $578 million, largely from attacks targeting Kelp DAO and the Drift Protocol. Research from CrowdStrike found that North Korea-affiliated hackers were responsible for $2 billion in crypto losses in 2025, up 51% from the year before.
Related: South Korea police raid Bithumb over lawmaker hiring favoritism probe: Report
The agreement will give the KNPA access to personalized training content by Chainalysis, along with professional certification programs and practical training.
“To investigate these cases effectively, Korean investigators need global visibility into illicit fund flows,” Chainalysis said.
Chainalysis has aided South Korean investigators for years. In September, police in Seoul dismantled an international hacking organization that had stolen approximately $30 million. The investigation began in South Korea but eventually saw investigators track the target to Thailand.
The MoU comes weeks after South Korean police launched a special multi-agency task force to tackle crypto-based money laundering, called the Money Laundering Eradication Task Force, which is led by the Economic Crime Investigation Division.
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A widely-tracked 5x-leverage perpetual on Hyperliquid tied to SpaceX’s impending IPO, expected to be the largest in history, has declined for three consecutive weeks.
The product, tickered as SPCX, traded near $157 on Wednesday, down about 27% from its mid-May launch price of around $216, after briefly touching $230.
That does not mean traders are betting against SpaceX, as SPCX still trades above the $135 IPO price. But the implied first-day premium has been cut hard. In May, the contract priced SpaceX roughly 60% above the offer, and it stood closer to 16% as of Wednesday.
The company set the offer price at $135 per share, with no price range for investors to push it higher or lower during the bookbuild. In most IPOs, bankers collect orders and move the price based on demand. But SpaceX has taken a fixed-price route where investors either take the price or do not.
That leaves the SPCX perp as one of the few places where a SpaceX-linked price is actually moving before the stock opens.
The contract does not give holders shares, allocation rights or any claim on SpaceX. It is a cash-settled derivative that lets traders bet on where the company’s equity value should trade. Unlike an IPO indication of interest, traders in the perp have money at risk and can lose it before the first share changes hands.
The official book still looks huge. Reuters reported that SpaceX has drawn more than $250 billion in investor interest for a $75 billion raise, making the deal several times oversubscribed. Large investors often ask for more stock than they expect to receive, especially in hot deals.
SPCX’s prices suggest traders still expect a premium to the $135 offer.
That may partly reflect broader market pressure. Crypto has weakened into the IPO, and bitcoin remains well below its January high. Some investors may also be raising cash to fund SpaceX allocations, adding pressure to the same risk market where SPCX trades.
Tim Draper says quantum computing will crack banks before it touches Bitcoin. But the reason has nothing to do with Bitcoin’s encryption strength.
In a post on X, Draper pointed to banks’ legacy infrastructure and Bitcoin’s network recovery mechanism as the reasons the blockchain outlasts the dollar in a quantum future. Both arguments have merit. But Bitcoin’s most criticized flaw, its complete and permanent transparency, turns out to be its most current quantum shield.
Why Banks Face the Greater Bitcoin Quantum Threat
The real quantum attack on banks is already underway. Security researchers call it “harvest now, decrypt later” (HNDL): adversaries today capture and store encrypted bank transactions, customer data, and institutional communications.
Those files sit in storage waiting for quantum computers powerful enough to break the encryption protecting them. When that moment arrives, decades of confidential financial history become readable. Banks cannot undo what has already been collected.
Bitcoin carries no equivalent vulnerability to this specific attack. Every transaction, address, and balance on the blockchain is already public. There is no encrypted archive of private financial activity to harvest.
Still, Quantum-resistant cryptos were the standout performers of May, outpacing Bitcoin by nearly 60% for the month, even as the broader market sold off.
Bitcoin’s Real Vulnerability, and the Fix
Bitcoin does carry one genuine quantum risk: its ECDSA signature algorithm (the system that authorizes transactions). Any address that has ever sent Bitcoin permanently exposes its public key on-chain.
A quantum computer running Shor’s algorithm could theoretically derive a private key from an exposed public key, targeting any used address. S
HA-256, which secures Bitcoin’s mining network, is effectively untouchable for decades; breaking it would require hardware with an energy output approaching that of a star.
The ECDSA problem already has a community-developed solution: BIP-360, which introduces ML-DSA post-quantum signatures approved by the US National Institute of Standards and Technology (NIST). Working BIP-360 transactions have been demonstrated on testnet. Bitcoin’s node operators can vote to upgrade the protocol when the threat demands it.
Banks have no equivalent self-governance mechanism. They operate under government mandate: the NSA’s Commercial National Security Algorithm Suite 2.0 requires all national security systems to be quantum-safe by January 2027.
Draper is right that banks face the greater quantum threat. He just left out the most interesting part of why.
The post Tim Draper Says Bitcoin is Safer from Quantum than Banks appeared first on BeInCrypto.
Prediction market Kalshi launched 3 market integrity measures: risk scoring for new listings, employment verification for markets with manipulation risk, and enhanced whistleblower reporting tools across the platform.
The measures take effect immediately and follow the first report from Kalshi’s independent Surveillance Audit Committee.
How Kalshi’s New Measures Work
According to the announcement, every proposed market now receives a risk score before listing. The system weighs six factors. These include corporate KPI risk, outcome concentration, market importance, regulatory fit, non-traditional insider risk, and national security risk.
Markets with high insider or manipulation risk now require traders to provide employment information. This lets Kalshi identify presumptive insiders and screen them out before any trade executes.
Finally, the whistleblower upgrade adds reporting tools to every market on the exchange. Tips route directly to a surveillance team that monitors the feed around the clock.
“By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity amongst federally regulated prediction markets,” Kalshi Head of Enforcement Robert DeNault said.
The prediction market platform also revealed that the enforcement record in Q1 included 150+ investigations, 20+ referrals to law enforcement, and 5 disciplinary actions. Kalshi said that its screening tools blocked more than 100 potential insider trades in the first quarter.
The Surveillance Audit Committee will deliver quarterly reports going forward. Its next review may show whether these measures curb insider trading on Kalshi.
Follow us on X to get the latest news as it happens
Why Prediction Markets Face Insider Trading Pressure
Insider trading has become a key integrity problem for prediction markets as trading volumes grow. Rival platform Polymarket partnered with Chainalysis to monitor trading activity.
Suspicious activity has surfaced, particularly in geopolitical markets. Both major platforms have since tightened their rules, and Kalshi’s update marks the latest effort to win back trader confidence.
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The post Kalshi Launches 3 Market Integrity Measures to Block Prediction Market Insiders appeared first on BeInCrypto.
The “crowd has written off Ethereum,” reported Santiment on Tuesday. However, this makes the probability of a rebound “substantially higher,” it added.
The onchain analytics platform said that Ethereum’s social sentiment has fallen into an “extreme fear zone” as traders react to months of underperformance relative to Bitcoin and many other altcoins.
The recent selloff has been amplified by ongoing debate surrounding the Ethereum Foundation, criticism of its leadership and priorities, and controversial comments from Vitalik Buterin that have “fueled further uncertainty.”
Is a Rebound Likely?
Positive-to-negative commentary has dropped to one of its lowest levels of the year, indicating that bearish narratives are now dominating social media, said Santiment.
The same situation unfolded when ETH prices tanked to similar prices in April 2025. The FUD hit record levels, and everyone cried, “Ethereum is dead.”
Four months later, it had tripled in price to an all-time high.
“Historically, Ethereum has tended to rebound when social sentiment reaches extreme FUD levels because prices frequently move opposite to the crowd’s expectations.”
When traders become overwhelmingly convinced that an asset will continue falling, much of the selling pressure has already been exhausted, it added.
TL;DR: Crowd has written off Ethereum, making the probability of a rebound substantially higher
Metrics Used: Positive vs. Negative Commentary Ratio
Link: https://t.co/vCjlfHHuGE
Ethereum’s social sentiment has fallen into an extreme “fear zone” as traders react to… pic.twitter.com/XHAf2KglbR
— Santiment Intelligence (@SantimentData) June 9, 2026
According to Glassnode, the share of ETH supply held at more than 3x profit has dropped to just 11%, its lowest level since 2017. Ether’s profitability profile has “fundamentally compressed” relative to prior cycles, it added.
To add balance, Bitcoin’s supply in loss has hit a new yearly high of 50%, so the bear market is battering all crypto assets.
ETH Price Outlook
Ether price continues to weaken in the short-term, with it tapping an intraday low of $1,620 twice over the past 24 hours.
With no current drivers or momentum, a fall back towards $1,500 is looking highly likely. This level serves as a major support zone, as it did 14 months ago, when Ether was going through the same pain.
The post Retail Writes Off Ethereum, Making Recovery More Likely: Santiment appeared first on CryptoPotato.
SpaceX is listed on Nasdaq on Thursday, June 11, at $135 a share, the largest IPO in history. Elon Musk cannot sell a single share for a year, but the investors his team personally selected to participate in the offering can sell immediately.
SpaceX reserved 5 per cent of the offering for a direct share program (DSP), with participants chosen “at the discretion of executive officers,” who carry no lockup restrictions whatsoever.
Why the Lockup Structure Is Unusual
Standard IPOs impose a 180-day lockup on all insiders. SpaceX’s structure does the opposite for a select group. The Australian Financial Review reported that a specific hedge fund is already preparing to sell its SpaceX stake as soon as it can.
Early investors who did not receive a DSP allocation face a staggered release, starting with 20% after the first earnings report, followed by 7% tranches at 70, 90, 105, 120, and 135 days. DSP participants face none of it.
As BeInCrypto reported in its analysis of the SpaceX-Anthropic IPO race, the concentration of early investor stakes and the unusual deal structure were already among the risks that set this IPO apart from anything Wall Street has seen before.
The SpaceX IPO Selling Pressure Ahead
Chad Anderson, founder of Space Capital and an early SpaceX investor, stated his intentions plainly: “We’ve been invested for almost ten years, it’s our business to return capital to investors.” That also appears to be a direct statement of intent to sell.
The 5 per cent DSP tranche adds a layer of selling that retail buyers on Robinhood, Fidelity, and Schwab will face from the opening bell.
Morningstar’s analysts put SpaceX’s fair value at roughly half its IPO price and advised investors to wait for the hype to pass.
Moreover, the same week that brings the world’s biggest IPO also brings CPI data and a market that has spent the month pricing in a Fed rate hike.
The founder cannot sell. His chosen investors can. Thursday will show which side of that equation sets the price.
The post Elon Musk Can’t Sell SpaceX Shares for a Year But Others Can Dump on Day 1 appeared first on BeInCrypto.
Kalshi has introduced mandatory employer disclosures for certain traders and expanded its market surveillance program after reporting more than 150 investigations, over 100 blocked insider-trading attempts, and 20 law-enforcement referrals during the first quarter of 2026.
Summary
- Kalshi now requires employer disclosures for traders in higher-risk markets and has introduced a new risk scoring system for proposed contracts.
- The platform said it blocked more than 100 potential insider trades, conducted over 150 investigations, and made 20 law enforcement referrals in Q1 2026.
- New compliance measures arrive as prediction markets face growing scrutiny from regulators, lawmakers, and federal investigators.
According to a company blog post published Tuesday, the prediction market platform has put several new compliance measures into effect immediately following recommendations from its independent Surveillance Audit Committee, which was established in February to oversee market integrity and enforcement efforts.
Among the changes, Kalshi said every proposed market will now receive a risk score before launch. The assessment considers factors such as regulatory compliance, insider-trading exposure, market significance, and national security concerns.
Bobby DeNault, Kalshi’s enforcement and legal counsel, said the company has added national security reviews to help identify markets that could create risks for participants or for the platform itself before they are listed.
For markets considered more vulnerable to insider trading or manipulation, Kalshi now requires participants to disclose their employers before they can trade. The company said the process allows it to identify potential insiders and restrict access before transactions take place.
Additional tools introduced under the program include a whistleblower reporting system that lets users flag suspected market abuse directly to the company.
Prediction markets face mounting scrutiny
Recent enforcement actions have placed prediction markets under growing examination from regulators, lawmakers, and law enforcement agencies.
Earlier this month, NPR reported that the Department of Justice and the Commodity Futures Trading Commission were investigating former U.S. Representative George Santos after Kalshi detected suspicious trading linked to a contract on whether he would attend President Donald Trump’s February State of the Union address. According to NPR, the platform froze Santos’ account and referred the matter to authorities after reviewing the trades.
Separate cases have emerged across the sector. Federal prosecutors charged a U.S. Army Special Forces soldier in April for allegedly using classified information to place profitable trades on Polymarket tied to the capture of former Venezuelan President Nicolás Maduro.
A month later, authorities accused Google software engineer Michele Spagnuolo of using confidential company information to trade Google-related contracts on Polymarket. Prosecutors alleged the activity generated roughly $1.2 million in profits.
Congress has also examined insider-trading controls within prediction markets. In May, House Oversight and Government Reform Committee Chairman James Comer requested information from Kalshi and Polymarket regarding their monitoring systems and enforcement procedures.
Compliance push comes as business expands
Recent compliance initiatives arrive during a period of rapid growth for Kalshi.
Just one day before the latest announcement, the Better Business Bureau’s National Advertising Division said it had referred Kalshi to regulatory authorities after the company declined to participate in a review of influencer advertising disclosures.
The organization said it was examining whether financial relationships between the platform and online promoters were clearly disclosed and whether advertising practices aligned with Federal Trade Commission guidance.
At the same time, Kalshi has continued expanding its cryptocurrency offerings. The company recently filed with the CFTC to list perpetual futures tied to Hyperliquid’s HYPE token after launching Ethereum perpetual futures under its American Perpetuals product line.
Bitcoin spot exchange-traded funds (ETFs) have fallen out of investor favor and how.
Total dollar value of net assets across the 11 spot ETFs stood at $77.58 billion on June 9. That’s the same level seen just after President Donald Trump won the presidential election in early November 2024.
This is not to say the ETFs didn’t grow in the 19-month period. Hopes that Trump would deliver on his campaign promise of friendlier crypto regulation helped push bitcoin higher, along with ETF assets. Total net assets crossed $90 billion within a week of this election win and went on to hit a record high of $169.54 billion in October 2025.
But since then, these post-election gains have been erased even though the Securities and Exchange Commission (SEC), under the Trump administration, dropped several high-profile enforcement actions. The U.S. has established a strategic bitcoin reserve and, further, the Digital Asset Market Clarity Act, which seeks to establish jurisdictional boundaries between the SEC and CFTC and give the industry the legal heft, is advancing in Washington.
In other words, the regulatory environment has never been more favorable, yet investors’ response has been to leave, pulling the net assets lower.
These ETFs have registered a net outflow of over $5 billion in four weeks. Cumulative net inflows since inception, which peaked at $62.77 billion in October 2025 when bitcoin was at its all-time high, have since declined by nearly $9 billion to $53.77 billion, the lowest since August last year.
Analysts blame macro factors, especially elevated inflation, for recent outflows from the ETFs.
“ETF outflows reflected short-term pressure as inflation drives the Fed hawkish, while on-chain supply tightening remains intact,” Binance Research said in a report shared with CoinDesk.
Market analyst and former co-founder of 21Shares, Ophelia Snyder, said AI and other trending corners of the financial market are draining capital from crypto.
“You have ETF outflows as investors are increasingly distracted by other narratives competing for attention and capital, whether that’s AI, SpaceX, or other high-profile growth stories. You have ongoing market jitters around geopolitics, the Strait of Hormuz, U.S. jobs data, inflation, and broader macroeconomic uncertainty,” she said in an email.
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