Crypto World
What are L2 sequencers? Ethereum’s centralized chokepoint, explained
Nearly every transaction on Ethereum’s layer-2 networks passes through a single machine, run by a single company, called a sequencer. It orders trades, sets the pace of the chain, earns the fees, and can go dark or say no. This guide explains what sequencers actually do, why the most decentralized ecosystem in crypto runs its fast lanes through central operators, what can and cannot go wrong, and the roadmaps racing to fix it.
Summary
- Ethereum layer 2 networks rely on centralized sequencers that order transactions, collect fees, and can temporarily halt network activity during outages.
- Sequencers cannot steal user funds because Ethereum secures transaction validity, but they can influence transaction ordering, censorship, and network availability.
- Rollup developers are working toward decentralized sequencing models to reduce reliance on a single operator while preserving Ethereum’s security and scalability.
Here is an uncomfortable fact about the scaled, modern Ethereum: when you swap on an Arbitrum exchange, mint on Base, or pay on Optimism, your transaction is received, ordered, and confirmed by one machine, operated by one company. That machine is the sequencer, and it occupies a position of quiet, enormous power: it decides which transactions enter the chain and in what order, it collects the network’s fee revenue, and when it stops, as major sequencers have during outages, the entire network simply pauses, every app frozen at once.
The layer-2 rollups are how Ethereum scaled, moving execution off the congested base chain while inheriting its security, and they now carry a majority of the ecosystem’s activity. That success makes the sequencer the most consequential piece of centralized infrastructure in an ecosystem whose founding promise is decentralization, and the tension is not a secret; it is an engineering roadmap, with every major rollup publicly committed to fixing it and none finished. Meanwhile the base layer itself is being redesigned around adjacent ideas, with the coming Glamsterdam upgrade enshrining proposer-builder separation into the protocol, which will reshape the environment sequencers operate in.
This guide covers the sequencer honestly: what a rollup is and what job the sequencer does inside it, the specific powers a centralized sequencer holds and their real-world failure record, the crucial distinction between what a sequencer can and cannot do to your funds, the economics of sequencing and why operators are slow to give it up, the decentralization designs, shared sequencing, based sequencing, sequencer sets, competing to replace the single machine, and how to evaluate any L2’s actual trust profile today.
Rollups in one section, and the sequencer’s job
A rollup is a blockchain that executes transactions on its own fast, cheap environment, then posts compressed records of everything it did to Ethereum, inheriting the base chain’s security for its history. Optimistic rollups post results and allow a challenge window for fraud proofs; validity rollups post cryptographic proofs that the results are correct. In both designs, Ethereum is the court of final record, and the rollup is a high-throughput execution venue whose state can always, in principle, be reconstructed and verified from the data it posts down below.
Someone, though, has to run the fast venue in real time: receive the flood of incoming transactions, decide their order, execute them, hand users instant confirmations, and batch the results down to Ethereum. That someone is the sequencer. It is best understood as three roles fused: the mempool and matching engine that orders the flow, the block producer that executes it, and the shipping department that posts batches to the base chain. The ordering role is the powerful one, because in any financial system, transaction order is money: who gets the arbitrage, whose liquidation lands first, who buys before the price moves. On Ethereum’s base layer that power is fragmented across thousands of validators and an entire adversarial supply chain built to capture it; on almost every major rollup today, it belongs to one operator, appointed by the team, running the official sequencer.
Why did the most decentralization-obsessed ecosystem in software ship its scaling layer this way? Because centralized sequencing is fast, simple, and safe to bootstrap: one machine gives instant confirmations, no consensus overhead, clean upgrade paths, and a single throat to choke during the inevitable early bugs. The architects’ wager was that sequencing could be centralized temporarily because the rollup design strictly limits what the sequencer can do, a wager the next two sections examine from both sides.
What the sequencer can do to you, and what it cannot
The sequencer’s powers are real, and enumerating them precisely matters more than the usual hand-waving in either direction.
What it can do. It can censor: refuse to include your transaction, whether by policy, error, or legal compulsion, and regulated operators have compliance obligations that make selective exclusion more than hypothetical. It can order: place its own or favored transactions ahead of yours, extracting the value that ordering confers, invisibly and profitably; most major operators publicly forswear this, and the forswearing is a policy, not a protocol guarantee. It can stop: sequencer outages have repeatedly frozen major rollups for hours, halting every application simultaneously, a failure mode with no analogue on the base chain, where thousands of validators mean the chain simply does not stop. And it can set the pace and price of inclusion, since it is the sole gateway to the network’s blockspace in real time.
What it cannot do, and this is the rollup design’s genuine achievement: it cannot steal. The sequencer cannot forge a transaction spending your funds, because every transaction requires your signature and the fraud or validity proofs posted to Ethereum would expose any invented state. It cannot rewrite settled history, because the history lives on the base chain. And, critically, it cannot permanently trap you, because well-built rollups include an escape hatch: a mechanism to force-include transactions directly through Ethereum, bypassing the sequencer entirely, so that even a fully censoring or dead sequencer can only delay users, not imprison their funds. The delay is real, force inclusion is slow and clumsy, but the distinction between a chokepoint that can inconvenience you and a custodian that can rob you is the entire difference between the rollup model and a centralized exchange, and it is why the ecosystem tolerated centralized sequencing at all. The trust profile resembles a bridge with a strong trust-minimized design rather than a multisig one: concentrated operationally, constrained cryptographically.
The honest risk summary, then: your assets on a major rollup are secured by Ethereum; your access, timing, and fair ordering are secured by one company’s machine, policies, and legal situation. For a casual user the distinction rarely bites. For a trader whose profits live in ordering, for a protocol whose execution quality depends on fair ordering and whose liquidations must land on time, and for anyone in a jurisdiction a compliant operator might be told to exclude, the sequencer is the trust assumption that matters most and is audited least.
The outage record: what centralization has actually cost
The sequencer risk is not theoretical, and the incident record is the best syllabus for what single-operator infrastructure means in practice. Every major rollup has suffered sequencer downtime: hours-long halts from surging inscription traffic, stalls from software bugs in batch posting, freezes during upgrades that went sideways. The pattern across incidents is consistent and instructive. Funds were never lost, the base-chain security model held every time, and the networks resumed with their histories intact, which is the design working as promised. What stopped, each time, was everything else: trading froze mid-move, liquidation engines could not reach positions as prices moved, arbitrage broke against live markets elsewhere, and users learned that force-inclusion, the theoretical escape hatch, was in practice too slow and too technical to matter inside an incident measured in hours.
The subtler lessons sit in the second-order effects. During one prominent outage, the network’s applications discovered their own emergency procedures assumed a working sequencer: pausing markets, updating oracles, and even communicating with users all routed through the machine that was down. During another, the resumption itself became a trading event, as hours of queued transactions landed in a burst against stale prices, a miniature of the reconciliation dynamics every gap-prone market knows. And across all of them, the operator’s incident response, status pages, engineer availability, post-mortems, was the de facto governance of a multi-billion-dollar economy for the duration, performed by a company under no protocol obligation to perform it well.
The record’s summary is fair to both sides of the argument: the constrained-power design has truly protected funds through every failure, and the single-machine design has just as surely imposed correlated, economy-wide halts that a decentralized system would not, which is precisely the trade the roadmaps exist to unwind.
It is also worth placing the sequencer inside the rollup’s full trust stack, because it is the most visible dependency but not the only one. A rollup’s security rests on three legs: the data it posts to Ethereum, which is what makes reconstruction possible and which the blob-fee era made radically cheaper; the proof system, fraud or validity, that polices state correctness, several of which still run with training wheels, security councils and permissioned challengers standing in for mature proofs; and the sequencer, which governs liveness and ordering. Independent frameworks grade rollups across all three, and the grades routinely surprise users who assumed the marketing: networks celebrated as trust-minimized frequently carry upgrade keys and council powers that outrank the sequencer question entirely. The sequencer is the right place to start reading an L2’s trust profile. It is the wrong place to stop.
The economics: why giving it up is hard
Sequencing is not just power; it is revenue, and the revenue explains the pace of decentralization better than any technical obstacle. A sequencer collects the difference between what users pay for L2 transactions and what it costs to post their data to Ethereum, a margin that widened dramatically when Ethereum’s blob-based data pricing collapsed posting costs, plus whatever ordering value it chooses to capture or auction. For a major rollup this is a nine-figure annual business, and it currently flows to the operating company or foundation, funding development and, in several cases, constituting the primary revenue behind the network’s token.
Decentralizing the sequencer means distributing exactly this revenue, and the designs on the table are, among other things, proposals about who gets paid. That is not cynicism; it is the correct lens for evaluating the roadmaps, because a decentralization plan that never specifies where sequencing revenue goes is a plan that has not confronted its hardest question. It also frames the user’s side of the bargain today: centralized sequencing quietly subsidizes the networks users enjoy, the same revenue-and-token linkage question running through every fee-generating protocol, and every step toward neutrality redistributes a pie someone currently owns.
The numbers behind the revenue argument are worth one concrete paragraph. An L2’s gross margin is the spread between user fees collected and data costs paid to Ethereum, and the blob-fee era transformed that spread: posting costs for major rollups collapsed by orders of magnitude while user fees, though lower, fell less, leaving the large networks operating at gross margins that most software businesses would envy. Public dashboards track the arithmetic in real time, revenue in, data costs out, and the residual accrues today to whoever runs the sequencer. That residual funds engineering, subsidizes user fees during growth pushes, and, for token-bearing networks, constitutes the cash flow every valuation argument ultimately references.
Decentralization designs must answer where it goes: to a staked sequencer set as yield, to a shared network as service fees, to Ethereum validators under based sequencing, or to users as rebates, and each answer creates and destroys different constituencies. The engineering of neutral sequencing was largely solved on whiteboards years ago; the political economy of its revenue is the part still being negotiated, which is the single most clarifying fact about why the timelines are what they are.
The fixes: three roads to a neutral sequencer
Three families of designs compete to replace the single machine, each trading different things.
The first is the sequencer set: replace one operator with a permissioned or staked committee running consensus among themselves, rotating leadership, so that censorship requires collusion and outage requires correlated failure. It is the incremental path, and its critics note that a small committee of known entities is a smaller improvement than it appears, particularly against legal compulsion, which scales to committees easily.
The second is shared sequencing: independent networks whose business is providing decentralized ordering as a service to many rollups at once, with the added promise of atomic cross-rollup composability, transactions that execute across multiple L2s together or not at all, recreating some of the seamlessness the multi-rollup world fractured. The trade is a new external dependency and, again, the revenue question: a shared sequencer wants paying customers, and rollups guard their margins.
The third and most Ethereum-native is based sequencing: hand ordering back to Ethereum itself, letting the base chain’s validators sequence L2 transactions as part of block production. It maximally inherits Ethereum’s neutrality and censorship resistance, at the cost of Ethereum’s pace, confirmations at base-layer speed rather than the instant feel users have learned, though pre-confirmation designs aim to restore the speed. Based sequencing’s fortunes are entangled with the base layer’s own evolution: the Glamsterdam upgrade’s enshrined proposer-builder separation restructures exactly the block-production pipeline that based rollups would plug into, which is why sequencer roadmaps and Ethereum’s core roadmap now read as one document with two authors.
No major rollup has completed any of the three. The public commitments are real, staged plans, published designs, testnets, and the timelines have slipped for years, because the current arrangement works, earns, and only embarrasses its operators when something breaks. The realistic forecast is a long middle period of committees and hybrid designs, with full neutrality arriving network by network, unevenly, this decade.
A note on terminology prevents one common confusion: the sequencer is not the prover, and decentralizing one does nothing for the other. The prover, in validity rollups, generates the cryptographic proofs of correct execution; the sequencer orders and executes. A network can decentralize sequencing while proving remains one machine, or the reverse, and the two roles fail differently: a dead prover delays finality on Ethereum while the chain keeps running, a dead sequencer halts the chain while finality of past batches stands. Roadmap language blurs the roles constantly, and reading which one a decentralization milestone actually addresses is a small skill that pays for itself.
How to read an L2’s actual trust profile
For a user or builder choosing among rollups today, the sequencer question compresses into a practical checklist. Who runs the sequencer, and under what legal jurisdiction? Does the network have working force-inclusion, and what is its delay, the number that bounds worst-case censorship? What is the outage history, and did funds ever depend on the operator’s goodwill during one? Is there a published ordering policy, first-come-first-served, private mempool, auction, and any mechanism enforcing it beyond reputation? What stage is the decentralization roadmap actually at, running code versus blog post? And where does sequencing revenue go, because that answer predicts the roadmap’s pace better than the roadmap does.
The sequencer is the honest asterisk on Ethereum’s scaling triumph: the rollup ecosystem genuinely extended the base chain’s security to vastly more activity at vastly lower cost, and it did so by concentrating, temporarily and by design, the one power the base chain had most successfully dispersed. The asterisk is shrinking, slowly, under public pressure and published plans, and until it is gone, the single most useful thing a user can know about any L2 is exactly what its one important machine can and cannot do to them.
The wider stakes deserve a closing frame, because the sequencer question is Ethereum’s decentralization thesis meeting its scaling success, and the resolution will define what the ecosystem actually is. If the rollup era ends with a handful of corporate sequencers ordering most on-chain activity, then Ethereum will have rebuilt, at the execution layer, the intermediated structure it was designed to replace, with the base chain reduced to a settlement court for private venues. If the decentralization roadmaps deliver, based sequencing, credible committees, shared networks, then the scaling will have been genuine: more activity, same neutrality, the original promise kept at a hundred times the throughput. Both futures are still open, the incentives lean toward the first and the culture toward the second, and the outcome will be decided not by white papers but by the unglamorous engineering and revenue negotiations described above, network by network, over the next several years. Users are not spectators to that contest: the trust profiles are public, the alternatives are one bridge away, and where activity settles is the only vote the operators have ever reliably counted.
A practical postscript for builders, finally: sequencer risk is inherited. An application deployed on a rollup imports its sequencer’s outage record, censorship surface, and ordering policy as silent dependencies, and the mature practice, visible in how serious protocols now deploy, is to treat chain selection as a security decision, document the force-inclusion path in the runbook, and design liquidation and oracle machinery to fail safely through a halt. The sequencer is infrastructure, and the first rule of infrastructure applies: it is invisible until the day it is the only thing that matters.
The reader’s shortlist for following the story: the independent rollup-risk frameworks that grade each network’s sequencer, proofs, and upgrade keys; the networks’ own decentralization roadmap pages, read with dates, not adjectives; the outage post-mortems, which teach more per paragraph than any documentation; and the base-layer upgrade calendar, since Glamsterdam-era changes to Ethereum’s block pipeline reshape what based sequencing can offer. The chokepoint is well documented by everyone except the marketing, and the documentation is where the truth lives.
If one image should survive this guide, make it the geometry: Ethereum scaled by turning one broad, slow, neutral road into a system of fast toll lanes, each with a single operator at the booth. The lanes carry the traffic, the operators are competent, and the toll revenue is building better booths. But the map of who can stop which cars, and where, is now the most important map in the ecosystem, and every reader of this piece can pull it up for any network in about five minutes. Do that, once, for wherever your funds live. It is the highest-yield five minutes in crypto self-custody.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. Network designs and roadmaps described are current as of July 9, 2026, and change frequently. Always do your own research.
Frequently asked questions
What is an L2 sequencer in simple terms?
A sequencer is the machine that runs a layer-2 rollup in real time: it receives transactions, decides their order, executes them, gives users instant confirmations, and posts compressed batches of the results to Ethereum. On nearly every major rollup today, the sequencer is a single server operated by the network’s founding company, making it the most centralized component in Ethereum’s scaling stack.
Can a sequencer steal my funds?
No. The sequencer cannot forge transactions from your account, because everything requires your signature, and it cannot fake results, because the rollup’s proofs posted to Ethereum would expose invalid state. Its powers are limited to ordering, delaying, censoring, and halting. Well-designed rollups also include force-inclusion mechanisms that let users push transactions through via Ethereum directly, so even a hostile sequencer can delay but not permanently trap funds.
What happens when a sequencer goes down?
The network effectively pauses: no new transactions confirm, and every application on the rollup freezes simultaneously until the operator restores service. Major rollups have suffered such outages lasting hours. Funds remain safe throughout, secured by Ethereum, but access stops, which matters greatly for time-sensitive positions like loans near liquidation.
Why are sequencers centralized if Ethereum is decentralized?
Because centralized sequencing was the pragmatic way to launch: one operator provides instant confirmations, simple upgrades, and clean incident response while the technology matured. The rollup design constrains what the operator can do, and every major network has published a decentralization roadmap. The trade-off was consciously temporary; its length is the controversy.
What is based sequencing?
Based sequencing hands transaction ordering back to Ethereum itself, letting the base chain’s validators sequence the rollup’s transactions during block production. It gives the rollup Ethereum’s full neutrality and censorship resistance, at the cost of slower confirmations, which pre-confirmation designs aim to offset. It is the most Ethereum-aligned of the decentralization paths.
What is a shared sequencer?
A shared sequencer is an independent network that provides decentralized transaction ordering as a service to multiple rollups simultaneously. Beyond decentralization, its selling point is atomic cross-rollup composability, the ability for transactions to execute across several L2s together, which single-rollup sequencers cannot offer.
Do sequencers extract MEV from users?
They can, since ordering power is exactly what MEV extraction requires, and a sequencer sees every transaction before it lands. Major operators publicly commit to neutral policies like first-come-first-served ordering, and some route ordering value into public goods or auctions. These are policies rather than protocol guarantees, which is a core argument for decentralizing the role.
How do I check how centralized a specific L2 is?
Ask five questions: who operates the sequencer and where; whether force-inclusion exists and how long it takes; the network’s outage history; the published ordering policy; and the actual stage of the decentralization roadmap. Independent trackers grade major rollups on these dimensions, and the grades differ far more than the marketing does.
ZeroStack’s plan to fund operations through 0G token reward sales is in jeopardy after a sharp drop in the token’s value. The downturn has also cast doubt on the company’s ability to continue as a going concern.
ZeroStack ended June with a $61.3 million first-half loss, negative working capital, and $2.6 million in cash.
ZeroStack’s Form 10-Q Disclosure
According to its Form 10-Q disclosure for the quarter ending June 30, ZeroStack held $2.6 million in cash, negative working capital of $600,000, an accumulated deficit of $339.1 million, and a $61.3 million net loss. The company also reported an accounting loss of $82.5 million after re-measuring its assets at fair value.
ZeroStack held 75.1 million 0G tokens with a fair value of $15.17 million and a recorded cost of $163.33 million. It also held a small Bitcoin (BTC) position, taking the total fair value of ZeroStack’s holdings to $15.21 million and the total recorded value to $163.43 million.
The downturn in the value of ZeroStack’s 0G tokens represents a 90% decline and has cast serious doubts on the company’s financial stability and its ability to continue operations without securing additional funding.
Staking Reward Sales To Fund Operations
ZeroStack received 6.62 million 0G tokens through staking rewards in the first half of 2026, earning $3.78 million in revenue. The company sold 4.94 million 0G tokens for $2.4 million and used $2.47 million in cash for other operational activities. The company plans to monetize staking rewards and fund operations.
It may also sell some of its underlying holdings. ZeroStack stated in its disclosure that the staked tokens are held in company wallets and can be withdrawn when needed. The company also noted that staking rewards could decline or disappear entirely, and that any sale depended on prevailing market conditions and token value.
However, ZeroStack’s strategy could be at risk due to the significant decline in the 0G token’s value. The token is currently trading at $0.14, declining nearly 5% in the past 24 hours.
Investor Confidence Shaken
ZeroStack’s 0G bet and the subsequent decline in the token’s value significantly impact its investors. The downturn could result in further write-downs, affecting stock price and investor confidence.
Investors will closely monitor ZeroStack’s next steps. The company can raise funds through asset sales, a capital raise, or restructuring efforts. However, its current model could fail if the 0G token’s value continues declining.
ZeroStack’s July 20 acquisition of Texas Blocker increased its 0G token holding to 223.77 million, amplifying its exposure to the token’s downturn.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
HashKey Exchange said it received approval to open client money accounts with JPMorgan, weeks after it launched customer fund accounts with DBS Bank.
The flaw allowing the exploit traces to a March 2021 firmware build that routed seed generation to a predictable software randomizer instead of the chip’s hardware one, leaving the resulting keys reproducible offline by anyone who works out the range. Coldcard manufacturer Coinkite released emergency firmware for every affected model and told users who had generated a seed on the flawed software to move funds to a wallet address made with a fresh one.
Thorn said he had no direct victim report and published his findings on pattern matching alone, choosing speed over confirmation to warn people while the transactions were still unconfirmed.
If it holds, however, the running total across four waves had reached about 1,816 bitcoin, near $114 million, from more than 5,200 addresses since July 30.
Thorn advised users to check funds, move anything off an affected device and bid the fee up.
The pattern covered blocks 960,778 to 960,792, with 218 transactions hitting 462 victim addresses at a rate of about 14 sweeps per block against 0.3 in a pre-incident control window, roughly 45 times normal.
Each of the spent coins that arrived after the Coldcard firmware boundary, and the destinations were fresh addresses with no prior history, one per victim rather than the shared collectors that made the first two waves easy to map.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Learn how to choose the best crypto payment gateway for businesses by comparing settlement, compliance, integrations, automation, and fees in 2026.
Companies serving international customers, digital-first audiences, or markets with limited card and bank transfer coverage may use crypto payments to fill the gap. A crypto payment gateway allows a business to accept crypto payments without building blockchain infrastructure internally. The provider can generate addresses, monitor confirmations, convert assets, screen transactions, and route settlements. The key question in 2026 is which provider can support the required assets, jurisdictions, settlement model, compliance process, and volume.
What defines the best crypto payment gateway for businesses?
The best crypto payment gateway for businesses depends on how the payment flow is expected to work.
Supported cryptocurrencies determine which assets customers can use, while blockchain coverage determines the available networks. The same stablecoin may operate on several blockchains with different fees and confirmation times.
The next question is what happens after payment. Some businesses retain crypto, while others convert it into stablecoins or fiat. Settlement options and automatic conversion should therefore be reviewed together. Auto-conversion can reduce volatility exposure and manual exchange work, while fiat settlement can simplify accounting and treasury management. However, availability may depend on the provider, jurisdiction, banking partners, and compliance checks.
Businesses must also decide how the gateway will connect with existing systems through an API, hosted checkout, or payment links. An API provides greater control over checkout logic and transaction handling, while hosted checkout reduces development work. Payment links support invoices and direct sales that do not require a conventional online store. Webhooks complement these methods by sending updates when a transaction is confirmed, underpaid, expired, or refunded.
Security and compliance determine whether the gateway fits internal policies. Relevant controls include KYB onboarding, AML screening, access permissions, withdrawal allowlists, transaction monitoring, and audit records. Transaction histories, exports, and reconciliation reports also reduce manual interpretation of blockchain records.
Finally, businesses need to assess reliability and total cost. Uptime and support affect payment continuity, while a headline fee may exclude blockchain charges, conversion fees, payouts, or fiat withdrawals. Providers should therefore be compared across the complete payment and settlement flow.
Comparison of leading crypto payment gateways
| Provider | Best suited for | Supported crypto | API | Fiat settlement | Auto-conversion |
| PassimPay | International digital businesses requiring multi-chain payments, automation, and several collection or payout methods | 74+ | Yes | Yes | Yes |
| CoinGate | Merchants seeking an established checkout ecosystem, major assets, e-commerce plugins, and scheduled settlement | 10+ core assets | Yes | EUR, GBP, and USD | Yes |
| NOWPayments | Projects prioritizing broad asset coverage, flexible integrations, subscriptions, or mass payouts | 350+ | Yes | Available through fiat processing and withdrawal tools | Yes |
| CryptoProcessing by CoinsPaid | Larger organizations requiring managed payment infrastructure, permanent deposit addresses, exchanges, and batch payouts | 20+ | Yes | Crypto-to-fiat exchange and bank withdrawal | Yes |
The table reflects publicly available product information. Exact availability can vary by jurisdiction, asset, network, account type, and onboarding outcome.
PassimPay overview
PassimPay combines payment acceptance, fund management, conversion, and payout tools in one crypto payment solution. The platform supports more than 74 cryptocurrencies across over 18 blockchains and is available in 122 countries.
Businesses can integrate through a Payment API or use Hosted Checkout when a ready-made interface is more suitable. Payment Links support remote billing, while Static Deposit Wallets provide reusable addresses for account-based deposits. Webhooks connect transaction events with merchant systems.
Beyond incoming payments, Mass Payouts and Batch Transactions support transfers to multiple recipients. Auto Conversion can move received assets into another supported currency, while Fiat Settlement provides an off-ramp for companies that do not want to retain all revenue in crypto. The Merchant Portal includes Transaction History and Reports for tracking and reconciliation.
PassimPay also provides AML Screening, checkout customization, and payment monitoring. It has more than 530 merchants, over 750,000 monthly transactions, more than $4 billion processed, and 99.99% uptime. Fees start at 0.5%, although the final cost depends on the services and transaction flow used.
This feature set suits SaaS, gaming, AI, hosting, e-commerce, and other digital services that need multi-market payments, user deposits, automated updates, conversion, or recurring payouts.
When different providers may fit different business needs
CoinGate may fit companies that value an established merchant ecosystem, e-commerce integrations, core cryptocurrency support, and settlement in major fiat currencies. Its standard plan lists a 1% processing fee and weekly automatic settlement.
NOWPayments may suit projects that prioritize asset breadth. It supports more than 350 cryptocurrencies, API-based payments, subscriptions, payment buttons, custody options, mass payouts, and auto-conversion. Its published service fee is 0.5% for single-currency payments and 1% when conversion is required.
CryptoProcessing by CoinsPaid may fit enterprise-oriented operations that need permanent deposit addresses, payment links, internal exchanges, mass payouts, e-commerce plugins, and crypto-to-fiat withdrawal. Its documentation lists support for more than 20 cryptocurrencies.
PassimPay may fit companies that need multi-chain coverage together with hosted payments, static wallets, automated conversion, fiat settlement, reporting, and payout functions. The final decision depends on the assets, networks, countries, controls, and settlement routes required by the business model.
Conclusion
Selecting the best crypto payment gateway for businesses requires more than comparing supported coins. Companies need to assess integration depth, blockchain coverage, settlement currencies, compliance controls, reporting, uptime, support, and total processing costs.
CoinGate, NOWPayments, CryptoProcessing by CoinsPaid, and PassimPay address different operational priorities. PassimPay stands among the more functionally complete options in this group for international digital businesses requiring multi-chain acceptance, automated fund management, and both collection and payout tools. Still, the appropriate provider is the one that matches the company’s payment flow, risk policy, technical resources, and settlement requirements.
Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.
The Coldcard exploit is not a hack in the way most people understand the word. Nobody broke into anything. Nobody phished anyone. Nobody stole a seed phrase from a sticky note. The devices generated weak private keys for five years, and an attacker figured out how to guess them.
Summary
- Four coordinated attack waves have drained an estimated 1,816 BTC (approximately $118 million) from Coldcard hardware wallets since July 30, with Galaxy Research tracking 5,294 affected addresses and warning that every vulnerable device will eventually be emptied.
- The exploit stems from a firmware build error present since March 2021 that reduced seed entropy from 128 bits to approximately 40 bits on Mk3 devices and 72 bits on Mk4/Mk5/Q models, making private keys guessable through brute force.
- Unlike the FTX collapse, which drove bitcoin off exchanges into self-custody, the Coldcard crisis is producing the opposite flow: users are moving bitcoin back to regulated exchanges and institutional custodians they previously abandoned.
- The net transfer of bitcoin from self-custody wallets to exchange addresses has been positive every day since July 31 according to on-chain flow data, reversing a two-year trend that began after FTX.
- Treasury companies that hold bitcoin through institutional custody, including Strategy and prospective entrants like Evernorth, benefit from a narrative shift that frames self-custody as a risk rather than a solution.
That distinction matters because it strikes at the foundation of the self-custody argument. The pitch for hardware wallets has always been simple: your keys, your coins, no counterparty risk. Coldcard was the gold standard of that philosophy. Air-gapped, open-source, bitcoin-only, endorsed by security researchers and institutional custodians as the most trusted device in the ecosystem.
If the most trusted hardware wallet can ship a five-year entropy bug without detection, the question is no longer whether Coldcard failed. The question is whether any hardware wallet can be trusted as the sole custodial layer for significant bitcoin holdings. And the market is answering that question with its feet.
The exploit in four waves
The first wave hit at 2:14 a.m. UTC on July 30. A single entity swept 594 BTC from approximately 500 wallets in 25 minutes. The second wave followed on August 1, draining 284.4 BTC from 2,889 addresses. The third wave hit later that day with 207.73 BTC across a separate address cluster. The fourth wave arrived on August 3, with Galaxy Research’s Alex Thorn identifying 448.7 BTC moving from 709 suspected victim addresses.
The combined estimate stands at approximately 1,816 BTC across 5,294 addresses. Galaxy measures 13.8 sweeps per block during active waves, roughly 45 times the baseline rate. Thorn described the pattern as “LIKELY Coldcard victims” based on unspent output characteristics and transaction behavior. The wording is precise because the attribution comes from blockchain analysis, not device records or law enforcement confirmation.
Coinkite, the Toronto-based manufacturer, traced the problem to a March 2021 firmware change. A preprocessor guard was supposed to select the hardware random-number generator during seed creation. The guard checked whether a configuration setting was defined, not whether its value was correct. The build system selected a deterministic MicroPython fallback instead. The firmware compiled without warnings. Seeds appeared normal. Addresses accepted deposits. Nothing indicated the entropy was catastrophically weak.
On Mk3 devices, the effective search space dropped to approximately 40 bits. A 128-bit seed has more possible combinations than atoms in the observable universe. A 40-bit seed has roughly one trillion combinations. That is within reach of commodity hardware. The Mk4, Mk5, and Q models include additional secure elements that mix their own entropy, producing seeds with approximately 72 bits. Better than 40, but still far below the 128-bit target.
The critical detail: updating the firmware does not repair an existing seed. Every Coldcard owner who generated a seed on affected firmware must create a new seed on patched hardware and migrate their funds. The key itself must be replaced.
The flow reversal: from exchanges to self-custody and back
After FTX collapsed in November 2022, the bitcoin community experienced its most dramatic shift in custodial philosophy. The phrase “not your keys, not your coins” became operational advice rather than a slogan. On-chain data showed a sustained, multi-month transfer of bitcoin from exchange addresses to self-custody wallets. The trend persisted for nearly two years.
The Coldcard exploit has reversed that flow. Net transfers from self-custody wallets to exchange addresses have been positive every day since July 31. The magnitude is not comparable to the post-FTX exodus, which involved hundreds of thousands of BTC over months. The current flow is smaller and more concentrated among users who specifically held Coldcard devices. But the direction of the flow is what matters for the narrative.
The users moving bitcoin to exchanges are not panicking retail investors. Many are technically sophisticated holders who chose Coldcard specifically because it was the most security-conscious option. They are making a rational calculation: the counterparty risk of an exchange is now quantifiable and insured, while the self-custody risk of a hardware wallet with a five-year entropy bug is neither.
That calculation is the narrative shift. Self-custody was supposed to eliminate counterparty risk entirely. The Coldcard exploit demonstrates that self-custody introduces its own category of risk: supply-chain risk, firmware risk, entropy risk, and the risk that the device you trust with your private keys is not doing what its manufacturer claims.
Who benefits: the treasury company model
The companies that hold bitcoin through institutional custody benefit directly from the narrative shift. Strategy, the largest corporate holder with over 550,000 BTC as of its latest disclosure, uses institutional custodians including Coinbase Custody and Fidelity Digital Assets. These custodians use multi-signature arrangements, hardware security modules, and geographic distribution that do not depend on any single device’s entropy quality.
The treasury company thesis is built on the argument that holding bitcoin through a publicly traded company is safer than holding it yourself, more liquid than holding it in a hardware wallet, and more capital-efficient because the company can borrow against its holdings. The Coldcard exploit strengthens the first claim in a way that no marketing campaign could.
Evernorth, the XRP treasury company preparing to list, faces a similar dynamic. Prospective investors who might have preferred self-custody of XRP now have a concrete example of what can go wrong with hardware wallet security. The listing calculus shifts when self-custody carries visible, quantifiable risk.
The broader pattern extends to every institutional custody provider. Coinbase Custody, BitGo, Fireblocks, and Anchorage reported inquiries surging after the first Coldcard wave. The product these companies sell is the elimination of exactly the risk that Coldcard exposed: the risk that a hardware implementation error, invisible for years, can make your private keys guessable.
The insurance gap and what it reveals
The Coldcard exploit has exposed an insurance gap that the industry has not addressed. Regulated exchanges and custodians carry insurance against theft, operational failure, and in some cases, hot-wallet compromise. The coverage limits vary, but the principle is established: if an exchange loses your bitcoin through its own failure, there is a claims process.
Self-custody has no equivalent. If a hardware wallet generates a weak key and an attacker drains the funds, the user has no insurance claim. Coinkite is a private company in Toronto. No product liability framework for hardware wallet entropy failures exists. The affected users can sue, but collecting meaningful damages from a hardware startup is a different proposition from filing a claim against an insured custodian.
The insurance gap is not a new observation, but the Coldcard exploit makes it concrete. A user who lost 10 BTC from a Coldcard has no recovery mechanism. A user who lost 10 BTC from Coinbase Custody would have a claim against the custodian’s insurance. The risk-adjusted comparison now favors institutional custody for any holding above the threshold where insurance matters.
The AI dimension and what it means for future exploits
Coinkite said the attacker used AI to discover the firmware flaw, and that Coinkite’s own AI audit of the same code weeks earlier found nothing. If that assessment is correct, it introduces a new variable into the self-custody risk model.
Hardware wallet security has historically rested on the assumption that open-source code is safer because more eyes can review it. The Coldcard firmware was public for five years. Thousands of developers could have inspected it. Nobody found the entropy bug. An AI model did.
The implication is that the advantage in firmware analysis has shifted from defenders to attackers. If AI can find subtle build-system errors that human reviewers miss, then every open-source hardware wallet is potentially vulnerable to the same methodology. The attacker does not need to find a new type of bug. They need to find a new instance of the same type of bug in a different codebase.
Block, Trezor, and Ledger have confirmed their products are unaffected by the specific Coldcard vulnerability. But “unaffected by this specific bug” is not the same as “provably secure against AI-assisted firmware analysis.” The assurance gap is structural, and the Coldcard exploit is the first public demonstration of it.
The self-custody argument is not dead, but it is wounded
The self-custody philosophy will survive the Coldcard exploit. Multi-signature arrangements that do not depend on any single device, hardware wallets from manufacturers with different codebases, and cold storage practices that incorporate dice rolls for entropy remain valid approaches. Coinkite itself noted that seeds created with at least 50 fair dice rolls are not considered exposed by this RNG issue.
What the exploit has damaged is the simplest version of the self-custody argument: buy a hardware wallet, generate a seed, store it safely, and never worry about counterparty risk again. That version assumed the hardware wallet worked as advertised. For five years, Coldcard did not.
The result is a more nuanced custody landscape. Self-custody for small amounts remains practical. Self-custody for significant holdings now requires either multi-signature setups, multiple hardware vendors, external entropy sources, or regular security audits that most individual holders cannot perform. For holders who cannot or will not take those steps, institutional custody has become the lower-risk option. And that is exactly the argument the treasury companies have been making all along.
What to watch
- Exchange inflow data. If the net transfer from self-custody to exchanges continues beyond the initial Coldcard panic, it signals a durable shift in custody preferences rather than a temporary reaction.
- Coinkite’s liability exposure. Any class-action filing against Coinkite will establish precedent for hardware wallet manufacturer liability. Watch for suits in US and Canadian courts.
- Institutional custodian onboarding numbers. Coinbase Custody, BitGo, and Fireblocks quarterly reports will show whether the Coldcard exploit translated into sustained new business.
- Strategy and Evernorth share price behavior. If treasury company stocks outperform bitcoin in August, the market is pricing the custody-narrative shift into equities.
- New firmware audit disclosures. If other hardware wallet manufacturers commission independent AI-assisted audits and publish results, it signals the industry is taking the supply-chain risk seriously.
Frequently asked questions
How much bitcoin has been stolen from Coldcard wallets?
Galaxy Research estimates approximately 1,816 BTC across four coordinated attack waves affecting 5,294 addresses since July 30. The figure is based on blockchain analysis and has not been confirmed by Coinkite or law enforcement.
Is the Coldcard exploit still ongoing?
Yes. Galaxy identified the fourth wave on August 3 and warned that vulnerable seeds will continue to be drained until affected users migrate to new wallets with fresh seeds on patched firmware.
Does updating Coldcard firmware fix the problem?
No. The firmware update fixes seed generation going forward, but it does not repair seeds already created on vulnerable firmware. Users must generate entirely new seeds and transfer their funds.
Are other hardware wallets affected?
Block, Trezor, and Ledger have confirmed their products are not affected by this specific vulnerability. However, the exploit demonstrates that firmware-level entropy bugs can persist undetected for years in any open-source codebase.
Why are people moving bitcoin to exchanges instead of other hardware wallets?
Regulated exchanges and custodians offer insurance, multi-signature security, and professional monitoring that individual hardware wallets do not. The Coldcard exploit made self-custody risk visible and quantifiable, changing the risk comparison.
Do treasury companies like Strategy use hardware wallets?
Strategy and other institutional holders use professional custodians like Coinbase Custody and Fidelity Digital Assets, which employ multi-signature arrangements and hardware security modules rather than single consumer hardware wallets.
Can affected users recover stolen bitcoin?
Recovery is extremely unlikely. The attacker controls the private keys. Bitcoin transactions are irreversible. Users with unconfirmed transactions may attempt Replace-by-Fee to redirect funds, but this window is narrow and not guaranteed.
Is self-custody still safe?
Self-custody remains viable with proper practices: multi-signature setups across multiple hardware vendors, external entropy from dice rolls, and regular security audits. Single-device, single-signature self-custody for significant holdings now carries documented risk.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Loss estimates are based on third-party blockchain analysis and have not been confirmed by the manufacturer or law enforcement. Published August 3, 2026.
Bitcoin slipped below $63,000 on Monday, Aug. 3, even as falling oil prices and stronger U.S. stock futures created a more favorable backdrop for risk assets.
Summary
- Bitcoin fell below $63,000 while oil and Treasury yields declined on renewed Iran diplomacy hopes.
- Coldcard attack estimates now exceed 1,815 BTC across more than 5,000 suspected victim addresses overall.
- Spot Bitcoin ETFs lost $61.53 million last week, ending three consecutive weeks of net inflows.
- Strategy added Bitcoin’s 200 week average as prices hovered only modestly above the indicator Monday.
- A Senate delay left the CLARITY Act without scheduled floor action before the August recess.
BTC traded near $62,556, down 1.38% over 24 hours and 4.35% over seven days. It had reached a Sunday high near $63,650 before sellers regained control. Ether fell about 1.8% to $1,841, while XRP and Solana also declined.
The weakness came as investors assessed renewed U.S. talks with Iran, another suspected Coldcard attack wave, fresh spot Bitcoin ETF outflows and the absence of the CLARITY Act from Monday’s Senate schedule.
Bitcoin price fails to follow the broader relief trade
President Donald Trump canceled a planned military strike on Iran and said negotiations would seek to address Iran’s nuclear program and reopen the Strait of Hormuz. Brent crude fell to about $83.28 per barrel, while West Texas Intermediate dropped to $79.47.
Nasdaq futures rose about 0.8%, while S&P 500 futures gained 0.6%. Treasury prices also strengthened as lower oil reduced some of the inflation concerns created by disrupted energy supplies.
Bitcoin did not follow that move. The divergence does not prove that one crypto event caused the decline. However, it shows that lower oil and stronger equity futures were not enough to overcome the pressures already affecting digital assets.
The relative weakness is consistent with a possible rotation of speculative capital toward technology stocks. Price action alone cannot confirm that movement, but renewed activity in equities can reduce demand for crypto when traders have several competing sources of volatility.
Coldcard losses keep security fears in focus
Galaxy Research head Alex Thorn identified what he described as a “LIKELY” fourth organized wave affecting Coldcard generated addresses. His updated estimate covered 709 potential victim addresses and 448.7 BTC. Activity reached 13.8 sweeps per Bitcoin block, about 45 times the rate measured during an earlier control period.
Galaxy had previously mapped three suspected waves involving 1,367.05 BTC across 4,585 addresses. Adding the latest estimate produces a possible total of 1,815.75 BTC across 5,294 addresses, assuming the groups contain no overlap.
That total remains an onchain estimate. Coinkite, law enforcement agencies and individual wallet owners have not independently confirmed every address as a victim. Galaxy has also not established whether one attacker controlled all four waves.
The incident concerns seed generation in affected Coldcard firmware rather than a failure in Bitcoin’s network or transaction cryptography. Coinkite said some devices created seeds with less randomness than intended, allowing attackers to search a smaller range of possible keys.
Coinkite has released corrected firmware for each affected model. However, installing an update does not repair an existing vulnerable seed. Users must generate a new seed with corrected firmware and transfer their funds. The company said its investigation remains ongoing.
As crypto.news previously reported, Thorn also identified similar transactions waiting in the mempool. Some users may be able to replace an unconfirmed attacker transaction with a higher fee transfer, although success is “not guaranteed.”
ETF outflows and the CLARITY delay add pressure
U.S. spot Bitcoin ETFs recorded about $61.5 million in net outflows from July 27 through July 31, based on SoSoValue data. The result ended three consecutive weeks of net inflows.
The final session caused most of the weekly reversal. Funds lost a combined $265.4 million on July 31. BlackRock’s IBIT recorded $122.7 million in withdrawals, while Fidelity’s FBTC lost $54.8 million and Grayscale’s GBTC posted $52.6 million in outflows.
The flows do not show whether investors expect further price declines. They do show that regulated fund demand weakened as Bitcoin moved closer to long term support.
Political uncertainty added another concern. Monday’s official Senate schedule included a vote on a spending measure but no action on the Digital Asset Market Clarity Act. The chamber’s published cloture records also showed no petition for the legislation.
As crypto.news reported, leaders would ordinarily need to file cloture by Wednesday, Aug. 5, to hold a possible Friday vote on proceeding to the bill. Such a vote would not constitute final passage.
The absence of scheduled action cannot be identified as the direct cause of Bitcoin’s decline. Still, it removes a possible near term policy catalyst while traders await a clearer Senate timetable.
Bitcoin price now faces a $60,000 support test
The supplied daily chart shows Bitcoin struggling below the $63,000 to $65,000 range. Momentum has weakened, with the relative strength index at 42.65 and below its moving average of 50.40.
The MACD histogram has also turned negative. A sustained move below $60,000 would weaken the current structure, while a recovery above $65,000 to $66,000 would provide stronger evidence that buyers have regained control.
Strategy founder Michael Saylor said the company had begun tracking Bitcoin’s 200 week moving average and its premium to that level. He said Bitcoin had remained above the average 92% of the time since the indicator became available. The percentage reflects Strategy’s calculation rather than an independent market study.
The next checkpoints are Coldcard’s technical review, Monday’s ETF flows and any Senate filing before Wednesday. Until those pressures ease, lower oil prices and stronger stock futures may remain insufficient to produce a lasting Bitcoin rebound.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Nasdaq-listed crypto treasury company ZeroStack has raised serious questions about its financial runway, warning in a recent SEC filing that “substantial doubt” exists about whether it can keep operating for the next year. The assessment marks a sharp reversal from its view just a quarter earlier, highlighting how dependent the company’s plan is on staking income and the liquidity of its Zero Gravity (0G) token.
In a Form 10-Q filed with the U.S. Securities and Exchange Commission on Friday, ZeroStack reported $2.6 million in cash and negative working capital of $600,000 as of June 30, along with an accumulated deficit of $339.1 million. The filing also detailed a major unrealized drag from its token treasury: an $82.5 million fair value loss on digital assets and a net loss of $61.3 million for the first half of 2026.
Key takeaways
- ZeroStack now says there is substantial doubt it can continue operating over the next year, reversing its earlier “sufficient” outlook in a prior filing.
- As of June 30, the company held 75.1 million 0G tokens, valued at $15.2 million versus an aggregate cost of $163.3 million (about 91% below recorded cost).
- The company relies on staking rewards and sales of 0G tokens to fund operations, making its cash position sensitive to token price and trading liquidity.
- ZeroStack reported $3.8 million in staking revenue in the first half of 2026, but it also recorded significant losses and could not conclude that its planned funding steps fully remove going-concern risk.
SEC filing flags going-concern risk
ZeroStack’s latest filing is notable not just for its headline loss figures, but for the governance and risk signal it sends to investors. Management stated that it could not conclude its plans would be enough to eliminate doubts about whether the company can continue as a going concern over the next year.
The company’s balance sheet underscores the pressure behind that conclusion. With $2.6 million in cash and negative working capital of $600,000 at June 30, ZeroStack’s near-term flexibility appears limited. It also reported an accumulated deficit of $339.1 million, reflecting losses that have compounded over time.
Beyond liquidity, the filing shows the company is carrying a large unrealized impairment in its digital asset treasury. ZeroStack disclosed an $82.5 million fair value loss on digital assets during the period, alongside a net loss of $61.3 million for the first half of 2026.
A treasury strategy tied to 0G’s market
ZeroStack’s operating model depends heavily on 0G token performance and the token’s market depth. The company reported that it holds 75.1 million 0G tokens with an aggregate cost of $163.3 million and a fair value of $15.2 million as of June 30. Put differently, the holdings were valued about 91% below their recorded costs.
That gap matters for both accounting and funding. If the company intends to finance operations through token sales—especially during periods of weak liquidity—its ability to raise cash could be constrained even if balances appear large on paper. The company explicitly linked its funding capacity to both the 0G price and trading liquidity, according to the filing.
ZeroStack’s management also described reliance on staking rewards and token sales. In practice, staking income can provide periodic cash flow, but it may not be sufficient in periods when token markets are illiquid or when valuations fall further.
Staking revenue helps—yet the runway question remains
During the first half of 2026, ZeroStack reported $3.8 million in staking revenue. After validator commissions, the company said it earned about 6.6 million 0G tokens from staking activity.
To support expenses, ZeroStack sold nearly 4.9 million 0G tokens for $2.4 million over the same period. The filing indicates that these cash inflows—staking-related and sale-related—are central to its ability to pay forecast operating costs.
ZeroStack also said that, if needed, it could sell some of its treasury holdings. However, management’s conclusion did not fully reassure the markets: it said it could not determine that those actions would be enough to address going-concern doubts.
The tension here is straightforward. When a company’s main treasury assets have experienced steep valuation declines, the theoretical ability to raise cash by selling holdings can become less effective in the real world—particularly if market pricing and liquidity do not support the volume and proceeds management may be counting on.
Backtracking from earlier filings
Perhaps the most consequential element of the news is the reversal in ZeroStack’s assessment. In its first-quarter Form 10-Q filing, the company stated that its cash and staking rewards would be sufficient to meet its working capital requirements and obligations for at least another year.
In the most recent filing, it no longer reaches that conclusion and instead flags substantial doubt about continued operations over the next year. The shift suggests that circumstances changed—or that management’s confidence in the sustainability of its funding plan weakened as results and valuations evolved.
ZeroStack’s corporate background also provides context for how the company arrived at this point. The filing notes that the company was previously Flora Growth, a cannabis and CBD products firm. On Sept. 19, Flora announced $401 million in funding for a 0G treasury strategy, including $35 million in cash and equivalent commitments and more than $366 million in in-kind digital assets. The company later rebranded as ZeroStack and retained its Nasdaq listing.
Those details underline why investors are likely to focus on token treasury outcomes: the strategy is fundamentally designed to monetize staking and manage liquidity through sales. When 0G’s fair value diverges sharply from recorded cost, the difference can translate into both accounting losses and real constraints on financing flexibility.
What readers should watch next is whether ZeroStack provides further clarity on how it plans to balance staking, token sales, and liquidity needs—particularly given its much narrower margin for error after the “substantial doubt” disclosure. Investors will also likely track changes in 0G trading conditions, since the company’s own filings tie its funding outlook directly to token price and market liquidity.
Ripple has expanded its digital capital markets strategy. The company announced today investments in Zilo and Lucuido – two firms that are focused on developing infrastructure for tokenized funds and institutional asset trading.
The move builds on existing partnerships with both firms. Ripple did not disclose the size of either investment.
Speaking on the matter was Nigel Khakoo, SVP, Trading and Markets at Ripple, who said:
“… ZILO and Licuido provide core capabilities that are essential to further scaling this shift: regulated digital transfer agency infrastructure and liquidity for issuance and collateral mobility. This is just the beginning of the journey, and we see a substantial opportunity to bring huge efficiencies to the investment sector over the next decade.”
ZILO provides transfer agency and fund administration technology. Its systems give asset managers and custodians regulated digital records for tokenized share classes. Licuido, on the other hand, operates an FCA-regulated platform that supports the issuance, distribution, trading, and use of traditional assets as digital collateral.
Ripple plans to integrate these capabilities with its infrastructure on the XRP Ledger. The company wants institutions to issue tokenized assets, hold them in custody, move them between investors, and use them as collateral without relying on legacy systems.
Naturally, RLUSD will serve as the regulated cash component for delivery-versus-payment transactions. This structure is designed to allow the asset and payment sides of a trade to settle together on XRPL.
The investments also support Ripple’s recent push to build a broader institutional platform around tokenization, payments, stablecoins, and trading. Last month, the firm launched Ripple Mint and made an investment in compliance provider Notabene. This strengthens the infrastructure that’s available to institutions using RLUSD.
It’s also noteworthy that the company has worked with Aviva Investors, Franklin Templeton, and DBS on tokenized fund and collateral projects. Ripple said that ZILO and Licuido will help turn those individual partnerships into infrastructure that asset managers can use at scale.
The post Important Ripple (XRP) Announcement, New Investments: August 3 appeared first on CryptoPotato.
The crypto exchange stopped accepting new registrations from Japan residents and will begin progressively restricting existing accounts on Nov. 1.
ZeroStack has warned its cash position may not support operations for another year.
Summary
- ZeroStack has warned that substantial doubt exists about its ability to continue operating over the next year after reversing its earlier liquidity outlook.
- The company reported $2.6 million in cash while its 75.1 million 0G token treasury was valued about 91% below its acquisition cost as of June 30.
- ZeroStack said staking rewards and token sales remain its main funding sources, but management could not conclude those plans would remove the going concern risk.
- The latest filing comes months after CEO Daniel Reis Faria said regulatory uncertainty continued to keep larger institutional investors on the sidelines.
According to a Form 10-Q filed with the U.S. Securities and Exchange Commission on Friday, Nasdaq-listed crypto treasury company ZeroStack said substantial doubt exists about its ability to continue as a going concern over the next 12 months, reversing the conclusion it reached in its previous quarterly filings.
As of June 30, the company reported $2.6 million in cash, negative working capital of $600,000, and an accumulated deficit of $339.1 million. During the first half of 2026, it recorded an $82.5 million fair value loss on digital assets and a net loss of $61.3 million, according to the filing.
Management said existing cash, proceeds from staking rewards, and possible sales of treasury assets are expected to support operating costs. Even so, the company concluded it could not determine that those measures would remove the substantial doubt surrounding its ability to continue operating for the next year.
ZeroStack’s 0G treasury has lost most of its recorded value
The filing showed ZeroStack held 75.1 million Zero Gravity (0G) tokens with an aggregate acquisition cost of $163.3 million. Their fair value had fallen to $15.2 million by June 30, leaving the treasury valued about 91% below its recorded cost.
The company said its operating model depends largely on staking rewards and periodic token sales, making its access to cash dependent on both the market price and trading liquidity of the 0G token.
For the first six months of the year, ZeroStack generated $3.8 million in staking revenue after earning about 6.6 million 0G tokens following validator commissions. Over the same period, it sold nearly 4.9 million tokens for $2.4 million to cover operating expenses.
Although management said additional treasury sales remain available if needed, the filing stated that those plans were not sufficient to conclude that the going concern uncertainty had been resolved.
Filing reverses the company’s earlier liquidity outlook
The latest assessment differs from the position ZeroStack presented just three months earlier.
In its first-quarter filing, the company said available cash together with expected staking rewards would be enough to meet working capital needs and other obligations for at least the following 12 months. The latest report withdraws that conclusion after a sharp decline in the value of its digital asset holdings.
ZeroStack adopted its current treasury strategy after operating for years as cannabis and CBD products company Flora Growth.
On Sept. 19, the company announced a $401 million financing package to establish a treasury focused on the Zero Gravity ecosystem. The package included $35 million in cash and cash-equivalent commitments alongside more than $366 million in in-kind digital asset contributions. Flora Growth later rebranded as ZeroStack while retaining its Nasdaq listing.
ZeroStack CEO previously pointed to regulation as another institutional hurdle
The company’s financial disclosure comes months after ZeroStack Chief Executive Officer Daniel Reis-Faria discussed another challenge facing digital asset companies: regulatory uncertainty.
Speaking to crypto.news in May, Reis-Faria said progress on U.S. stablecoin legislation had reduced one source of uncertainty for investors but had not yet convinced larger institutions to increase participation.
His comments followed a bipartisan agreement between Senators Thom Tillis and Angela Alsobrooks on stablecoin provisions in the CLARITY Act that prohibited interest-like payments resembling bank deposits while allowing activity-based rewards tied to payments and platform use.
At the time, Reis-Faria said the remaining concern was not the legislation itself but uncertainty over how regulators would implement it. Under the proposal, the SEC, CFTC and Treasury would jointly develop implementing rules within one year after the legislation became law.
JPMorgan had previously described passage of the CLARITY Act by midyear as a positive catalyst for digital asset markets, while Blockchain Association CEO Summer Mersinger said resolving the stablecoin yield debate moved comprehensive market structure legislation closer to becoming law.
Standard Chartered also estimated that allowing unrestricted stablecoin yields could redirect as much as $500 billion in bank deposits by 2028, providing context for the banking industry’s resistance during negotiations.
Company now faces both market and funding pressure
The SEC filing indicates that ZeroStack’s operating cash generation remains closely tied to the performance of the 0G ecosystem through staking income and token sales.
With the market value of its treasury declining substantially from its acquisition cost, management said future liquidity will continue to depend on available cash, staking rewards, token prices, and market liquidity.
Despite outlining those funding options, the company concluded that substantial doubt about its ability to continue as a going concern remains in place for the coming year.
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